Industry: Margins tax would hurt business climate

Consumer prices could go up and Nevada’s business-friendly climate would suffer if a state margins tax becomes law, Carson City industry executives said Wednesday.

“Nevada’s going to be the loser,” said Dave Bess of Carson Hi Tech. Bess was a member of a panel at the Nevada Business Connections breakfast meeting at the Gold Dust West Casino. Bess said he feared if a 2 percent gross margins tax makes the ballot, uninformed or misinformed voters will approve.

Though initially it would impact only $1 million plus for affected firms, he said, eventually state government would lower that figure to raise more revenue. Bess and others were replying to a question posed by John Bullis, a Carson City CPA, who served as panel moderator.

Mark Thomas of Betra Manufacturing Co., another panel member, replied to the question with a question of his own.

“Don’t they realize that it makes everything they buy more expensive?” Thomas said.

Bess riffed on that, saying the 2 percent would be passed through the economic system as goods move from manufactured components to finished products, on through middlemen to the retail level, and would wind up hitting consumers up with even greater increases.

Collie Hutter, president of the Click Bond aeronautics supplier that is one of Carson City’s larger manufacturers, said she would fight the margins tax proposal. She was a member of the NBC breakfast audience.

She also put in a plug for Western Nevada College and industry cooperation to train young people for manufacturing, saying exciting progress is under way, as did Len Semas of Cubix Corp., who teaches at WNC.

Semas, another audience member, said vocational and educational matters should build a bridge to help bring academia and the real world together.

Walt Owens of Owens Precision Inc., a third audience member, said students need safe schools and parents who support them in education and training pursuits.

When panel members were quizzed on the subject there was little dissent, but one panelist said his firm trains people on its own if they show promise and will work.

Bob White of Taiyo America Inc. said the firm’s work force has held steady for years. He said turnover has been only about 2 percent.

Basically, White said, he seeks people who wake up, come to work, can learn, are drug free and do the work.

Also on the panel was Red Sexton of Jube Machine Inc., who said his firm has cut back from 15 employees to two. But he doesn’t blame Nevada and prefers the Silver State to southern California, which is where he began before coming to the Silver State.

Kris Holt, NBC executive director, spoke briefly. He quibbled with a previous newspaper report based on Coldwell Banker Commercial data compiled by two brokers estimating the city’s industrial vacancy rate has dropped from 21 percent to 7 percent. He said it was 22 percent and has dropped to 12 percent.