Payroll tax proposed by Senate
The tax plan de jour again has a payroll tax as its major revenue generator.
At the urging of Sen. Mark Amodei, R-Carson City, the net-profits tax disappeared on Tuesday from the proposal the Senate is trying to build consensus around. He said no one knows what it will generate, and other states have found it can fluctuate widely depending on the economy.
“A payroll tax is stable, it’s easy to implement, and it generates a lot of money,” said Amodei.
He said making business pay a 1.25 percent tax on the first $21,500 of each employee’s pay would generate $160 million the first year and $249 million each year after that.
The tax would come to about $268 per employee per year.
“Net profits is dead,” said Senate Majority Leader Bill Raggio, R-Reno. “Our proposal is essentially an employee tax.”
The only problem with the plan is that the Assembly has already rejected the idea of an employee payroll tax.
“We rejected that two months ago so obviously we’re not looking at that as a broad-based business tax,” said Assembly Majority Leader Barbara Buckley, D-Las Vegas.
She added that “net profits with a cap is not dead.”
Raggio and Amodei said the Senate Republicans are prepared to support a payroll tax.
Amodei said the payroll tax also allows them to eliminate the Business License Tax and the Real Estate Transfer Tax as well as reduce the proposed 65-cent increase in cigarette taxes back to 35 cents.
Raggio adjourned the Senate for the night while Assembly Democrats huddled with gaming lobbyists, who oppose the idea of a payroll tax. They say that would hit their industry harder than most because of the large number of resort employees.
Both houses will resume work today — the ninth day of the special session.