Chuck Muth: Why creating jobs this way just ain’t right
October 19, 2012
The headline on Rich Velotta’s recent VEGAS INC story would seem to be very good news for a state that continues to lead the nation with double-digit unemployment: “Two companies eye move to Las Vegas Valley, bringing 300 jobs.”
Instead, it’s really ticking off a growing number of Nevadans.
The story notes that the two companies – Niyato Industries and V5 Technologies – plan to open operations here by the end of the year, creating over 300 jobs that will pay average wages in the $25-30 range. Again, good news, right?
But here’s the thing: Velotta reports that the companies’ relocation plans are likely contingent upon getting some nice, juicy tax breaks.
“Niyato’s request is for sales tax abatements of $213,253 and modified business tax abatements of $331,186,” Velotta reports. “It’s also seeking a sales tax deferral of $69,919 and is requesting federal training grants administered through the state of $500,000.”
For its part, V5 Technologies “is seeking $175,436 in sales tax abatements and $16,555 in modified business tax abatements as well as sales tax deferrals of $7,520.”
Don’t get me wrong; I’m all for lower taxes. And Gov. Brian Sandoval’s Office of Economic Development assures us that the net new tax revenue the companies would generate will more than offset the tax incentives they’d be extended. However…
What about all the Nevada companies that are already here?
“Let’s see if I have this right,” one prominent and very successful Las Vegas business owner put it to me.
“If you raised your family here, started a business here and then employed more and more people here; paid all your taxes here, gave to charities here, never asked for any special favors or help from the government here; went through all the ups-and-frightening downs here, but stuck with it, you get no tax relief.
“In other words, the rest of us who already live and run businesses here must pay higher taxes to build roads, hire police and fire officials, build schools and hire teachers for these companies or they won’t relocate here? This is very upsetting.”
Yes, it is.
First, the government shouldn’t be using tax dollars paid by Nevadans and Nevada businesses to give tax breaks to non-Nevada businesses to move into Nevada and compete with existing Nevada businesses. And even if there are no competing businesses here presently, it still doesn’t make it right for the government to pick and choose which businesses the government subsidizes with our dollars.
And if tax relief is good enough to spur job creation for out-of-state companies, than it should be good enough for our existing Nevada businesses that are already here. After all, despite what President Obama thinks, when it comes to present-day Nevada: They built that!
• Chuck Muth is president of CitizenOutreach.com.