Hutchison opposes state tax initiative

State Sen. Mark Hutchison, a candidate for lieutenant governor against Sue Lowden, recently spoke at the Fallon Rotary Club to discuss the ramifications of the Education Tax Initiative, a 2% percent tax which would hurt businesses that gross more than $1 million annually.

Hutchison explained the legislation is a ballot initiative whereby teachers and labor unions obtained enough signatures to put the measure on the general election ballot.

Since Hutchison spoke, the Nevada Public Research Institute in Las Vegas announced Friday that leaders of the AFL-CIO have decided not to support the Education Tax Initiative.

In a statement, “NPRI applauds the AFL-CIO for publicly detailing how economically destructive the margin tax would be to Nevada’s still struggling economy.

“As NPRI has been saying for years and the AFL-CIO resolution notes, the margin tax would impose a large new tax burden on businesses that are losing money, including construction companies, and this new tax would bankrupt businesses throughout the state. We welcome the AFL-CIO’s support in helping the public understand that taxes — taking money out of the private sector — have destructive effects for individual families and the economy as a whole. “

Hutchison said he opposes the measure because it will set the state back economically for years. He said business is serious about education, but the tax initiative is not the way to do it because another sector of the economy will be nearly ruined; furthermore, if it does pass, he said the Legislature cannot alter the bill for at least three years.

During his remarks, Hutchison told of a local dairyman’s concern with his family farm. During the past five years, he told Hutchison he has broken even or lost money.

“Under this margin tax, the farmer will owe Nevada $50,000,” Hutchison said.

While businesses face an uncertain future if the tax should pass, Hutchison said current firms in the Silver State will shutter their doors and head to a “friendlier” state. He also said the Education Tax Initiative would give Nevada the fifth highest tax and not make it a tax friendly state, a distinction Nevada has had for generations.

“Many businesses said they would leave … go to Idaho or Wyoming,” Hutchison said. “We have a very challenging business climate and economic environment. We will see jobs leave.”

Hutchison, though, said he is bothered and puzzled by proponents of the bill who feel such big businesses such as Walmart should pay more taxes for education; instead, Hutchison said the smaller businesses will be the ones hurt the most, not the Walmarts or Targets or Lowe’s.

Hutchison said many employee groups and business leaders as well as gaming, which derives much of its money from motel or hotel guests, opposes the initiative.