(Michael Chamberlain/Nevada Business Coalition) – Get ready because they’re coming after you and they want to make you pay.
Monday was the last day that individual legislators could introduce bills in the Legislature. There was a slew of proposals – as usual, some good, some bad, and some too horrific to even mention.
Three that fit the last description we’re going to mention anyway. While most of the big government advocates have been content to stage big productions rather than discuss the issues before them, not all of them are avoiding the “t” word.
AB333, 335 and 336 were introduced Monday. These are tax increase bills we’ve all been waiting for.
Lost your job and want to take solace in a few drinks and a couple smokes? The tax man might help make sure you don’t overdo it.
AB333 contains massive tax increases on liquor and tobacco. Cigarette taxes will more than double and levies on other tobacco products will rise by more than 80%. The bill would raise liquor taxes from 25% to more than 50%.
AB335 would impose a 5% sales tax on certain services purchased in the State. Not all services, just a selected, seemingly arbitrary, list. The tax would apply to advertising, telephone marketing, gift-wrapping, boxing packages, armored vehicle transport, gym membership or fitness equipment rental or instruction, athletic instruction, dance instruction, barbering, cosmetology, pet grooming, laundry or dry-cleaning services, swimming pool cleaning or maintenance, storage rental, pest control, diaper services, dating services, investment services, pay-per-call services, bail bondsmen, lobbying, massage therapy, private investigation and collections services.
Apparently the tax would not apply to any contracting services (services requiring a contractors license are explicitly exempted from the swimming pool services taxed), computer repair and a whole host of other services that people purchase every day. Lucky you, if your company doesn’t perform the services on the list of those targeted by this bill. But, they’ll be coming for you soon enough, especially when they realize how much money they’re “losing” by not including you.
AB335 also takes the tax increases imposed in the last couple years that were scheduled to sunset at the end of July of this year and extends those sunsets two more years, until July 31, 2013. By that time, we’ll be so used to paying them that they may as well just keep them on the books forever. At least that’s what they’ll try to tell us.
AB336 imposes a corporate income tax on Nevada businesses for the first time ever. The proposal would levy a 4.5% tax on all net income about $500,000. A company’s net income would be the same as that used on its federal tax returns.
It is imperative that we do not let this camel’s nose inside the tent. For those businessowners who think their companies will be immune from this tax, think again.
History shows that these types of taxes are never the panacea their proponents believe them to be. When it fails to collect as much revenue as it is projected to and is insufficient to cover the increased spending that will result from its enactment, the response will be to lower the threshold.
When the federal income tax was instituted before World War I, it was only ever supposed to apply to those making over $1 million per year, which is equal to over $20 million today. Its supporters claimed middle-class families would never have to pay it. Well, we all know how that one turned out.
So, watch out, because here they come. They’re coming after all of us and their insatiable. There is no amount of money that will be enough. The only way to stop them is to stop them before they even get started.
(Michael Chamberlain is Executive Director of Nevada Business Coalition.)