Letters to the editor for Thursday, Oct. 9, 2014

Margin Tax Initiative is bad for all of us

The proposed Margin Tax Initiative is just another example of the harebrained schemes from our educational establishment. It is, in essence, a gross receipts tax of 2 percent on every transaction, regardless of the seller’s projected cash flow.

How so? If a business cannot forecast that its annual gross revenue at the start of its fiscal year will or will not exceed the $1 million threshold (especially true for small businesses), the easiest thing for it to do is to add on a 2 percent tax on every transaction.

If, at the end of the year, the company exceeds the $1 million gross receipts threshold, it will then have the funds on hand to pay the tax. If the company does not reach the $1 million threshold, it can save the tax collected for future payments, or pocket it as a windfall.

It is a truism that companies don’t pay taxes; people do. The passage of the margin/gross receipts tax will result in every transaction (including services) being taxed at an additional 2 percent, bringing transactions that are currently exempted from sales taxes into the tax net.

Bottom line — every business will end up charging every customer the 2 percent add-on, union supporter’s wishes to the contrary. Vote no on the Margin Tax initiative;­ it’s bad for all of us.

Dave Thomson

Carson City