Nevada businesses and jobs will wind up in jeopardy if a business margins tax wins voter approval, a Reno-based economist who is a senior fellow at the Cato Institute said Monday.
Speaking at an informal group’s luncheon in Carson City, Gerald P. O’Driscoll Jr. opposed the 2014 ballot initiative that calls for a margins tax on businesses with receipts of $1 million or more. The ballot initiative puts the question to voters Nov. 8, 2014, and would require approval two times in separate election years.
Nevada’s tax would be at least twice as high as one already in place in Texas, said O’Driscoll, formerly vice president of the Dallas Federal Reserve Bank in the Lone Star state. In fact, it would be even higher when you count multiple deductions and credits on the tax in Texas, according to O’Driscoll, who was vice president at the Dallas Fed from 1982 to 1994. He came to Nevada in 2003.
“Why is the tax so bad?” O’Driscoll said in a rhetorical question to his audience at Grandma Hattie’s. “Because it’s a job killer.”
He said businesses won’t come to the state from California or elsewhere, jobs will be lost due to squeezed profits and other factors and there is no guarantee in the initiative language that the money would wind up being used for education as backers hope and intend.
Ballot initiative No. 1, sparked by a petition that he said runs 56 pages and advocates a complicated tax, was proposed by the Nevada State Education Association. The association has estimated it would raise $800 million.