Taxing businesses hurts us in many ways
From time to time, the need for government to cover its excess spending by raising revenue, i.e., taxes, almost always ends up targeted at businesses.
Nevada does not have an income tax system for individuals or businesses, thank God!
In California, they love to suck their businesses dry of any cash they can find. Does anyone wonder why so many businesses are leaving California? Our local development authorities are doing a darn good job of attracting as many of those exiting California businesses as possible. Our major competitors are the other states with no income tax on businesses. (Texas, Wyoming and Washington.) If we had an income tax system on businesses, we would just be chasing those businesses right on over into other states instead of stopping here.
So, what does a business bring to Nevada if its doesn’t pay income taxes? Actually, a lot.
First, businesses employ folks. Those employees then have money to buy goods and services, which helps other local employees get or keep their jobs. Their spending also creates sales tax revenues, fuel tax revenues, vehicle registration fees, etc. Many of those employees eventually purchase a home, driving home prices back up.
Second, they build buildings, add on to existing ones, or at least remodel them. This helps our struggling construction industry.
Third, they buy goods and services from other local businesses. Just like their employees, this helps support the success of other businesses and their employees.
Fourth, they do pay taxes. Modified business tax (based upon payroll), unemployment tax (helps cover costs of continuing unemployed as well as hiring some, stopping the drain of unemployment compensation on the state, as well), annual business registration, use tax, fuel tax, utility taxes, vehicle registration tax, etc.
Stop and ask yourself, what would Nevada look like if there were no new businesses moving in and setting up shop? (Or existing ones expanding.) I hope the talk of taxing businesses goes away quickly and is replaced with discussion about how we can help relocate more businesses to Nevada. Gov. Sandoval has been working hard to help promote Nevada. Let’s give him a hand.
Did you know that in 2011, 51,200 Nevadans were employed in manufacturing or that 21 percent of global manufactured goods are made in the good old USA? China comes in second at 15 percent. Because of negative regulations, high costs of energy, lawsuits, trade policies, etc., it is 20 percent more expensive to do business in the U.S. than it is in our nine-largest trading partners, and that is excluding the higher cost of labor in the U.S.
Federal regulations cost U.S. businesses $1.7 trillion annually. Regulations in states such as California add much on top of that, and Nevada does not need to copy California when it comes to onerous and costly regulations. The average U.S. manufacturing worker’s earnings are 37 percent higher than the average of all other U.S. industries combined.
Words to live by: “Whatever your lot, cultivate it.”
• Kelly Bullis is a Certified Public Accountant in Carson City. Contact him at 882-4459. On the web at BullisAndCo.com.