(Michael Chamberlain/Nevada Business Coaliton) – During the Legislature we heard a constant refrain about the need to improve our economy and bring jobs to Nevada. The left incessantly repeated that, since our economy was struggling despite what they claimed was our low-tax environment, that low taxes were not the answer.
They are right, to a point, but they’re also missing something – something equally as important. Low taxes are not, in and of themselves, enough to promote a friendly business environment and a strong economy. Overly burdensome regulations, requirements and red tape can more than offset the effect of low taxes. And Nevada is a prime example.
There seems to be a prevailing thought among some people that businesses exist to provide tax money for the government and government should forever search for ways to squeeze additional funds from private sector companies.
A few days ago, KPVM-TV General Manager Vernon Van Winkle discovered that, through an oversight, they had neglected to renew their annual business license and submit their annual list of officers, which had been due on May 31. Each of these also includes the payment of a fee ($200 for the license and $125 for the list of officers).
When Van Winkle went to renew these he found that because he was late he would be forced to pay penalties. The penalties tacked on more than 50% to the cost, turning $325 worth of fees into $500!
These penalties are the same whether the company is late by one day or a year. So the penalties for Van Winkle’s 19-day oversight amounted to more than 700% in annual interest! No doubt a private company that charged that much would be the object of a criminal probe.
As if that’s not bad enough, it could have been even worse. Secretary of State Ross Miller had a bill introduced that would have raised the penalties for just such an oversight to a minimum of $1,000. Several amendments were added to the proposal, including one that allowed the $1,000 minimum fine only in cases in which the failure to renew was willful.
Although both the Assembly and Senate passed versions of the bill it was never sent to the Governor for his signature and, thankfully, died in the Legislature. But the desire to squeeze even more out of the companies that choose to do business in the Silver State is evident. Furthermore, it rears its head in more ways than merely efforts to pass legislation.
When Van Winkle called the Secretary of State’s office to plead his case, the employees were, in his words, “very stern and unsympathetic.” He was left with the impression that the government believes it is their job to take as much money from the business as it can.
Because Van Winkle is in the media business he has gotten to know many elected and appointed government officials so he has an avenue to register his complaints. But what of the thousands of other businesses that don’t?
What about all of the businessesowners who just want to go about their business but are smacked around every day by this type of thing? How many of them simply decide, especially with all of the struggles they currently have to go through, they’re not going to take it anymore and close their doors? How many budding entrepreneurs are constantly stifled by the mountains of red tape and the uncaring bureaucracy that produces it until they just give up or move to a friendlier venue?
I know they’re out there because I know them.
While the state wants to appear business-friendly, many of its agencies, departments and subdivisions act entirely contrary to that goal. Rather than making it easier, they make it more difficult. Rather than understanding what businessowners go through attempting to comply with the myriad and sometimes confusing array of regulations, they seem aggravated. Rather than assisting businesses to traverse the maze of red tape, they appear unconcerned and put out.
We should be encouraging businesses to operate in Nevada. And, yes, they need to play by the rules and operate within the law. But we shouldn’t be heavily penalizing companies for minor oversights. We shouldn’t be piling onto the already-monstrous mountains of regulations and red tape. We shouldn’t be endlessly exploring new avenues to squeeze more and more money out of them.
If we want businesses to operate here we have to make it so businesses want to operate here.
(Michael Chamberlain is Executive Director of Nevada Business Coaliton.)