(Guy Nohra) – Assembly Concurrent Resolution 7 (ACR7), introduced by Nevada Assemblymembers Natha Anderson and Venicia Considine, is a bill that seeks to study the implementation of wealth taxes in the state of Nevada.
While the stated intention of this bill is to modernize the tax structure of the state, the reality is that wealth taxes have numerous negative consequences that make them an impractical and unfair way to generate revenue.
Firstly, wealth taxes are incredibly difficult to implement.
Wealth is often difficult to measure, especially for those who own assets that are hard to value, such as art or antiques. This difficulty in valuation can lead to disagreements over the amount of wealth a person possesses and lead to numerous legal disputes. And the value of assets fluctuates constantly. How will that be monitored?
Furthermore, unless there is a wealth tax in every state, wealth taxes will lead to “rich” individuals fleeing the state to avoid paying these taxes, further eroding the state’s tax base and ultimately defeating the purpose of implementing such a tax.
Let’s not shoot ourselves in the foot. Even California doesn’t have a wealth tax. Is this an attempt to outflank our neighbors to the west…and why?
Secondly, wealth taxes are often counterproductive and result in the opposite of their intended effects.
Wealth taxes can harm economic growth by discouraging investment and entrepreneurship. Instead of encouraging individuals to invest in businesses and create jobs, wealth taxes disincentivize risk-taking and can lead to a slowdown in economic growth.
Thirdly, wealth taxes can be unfair and punitive.
Wealth taxes are based on the (false) premise that individuals with higher incomes should pay a higher percentage of their wealth towards taxes. However, this system ignores the fact that wealth taxes disproportionately affect those who have worked hard to accumulate their wealth and can penalize those who have made sound financial decisions.
The idea of punishing the successful is preposterous and rooted in envy.
Last but certainly not least, as Assemblyman Greg Hafen pointed out…
“A wealth tax is unconstitutional in two sections of our Nevada constitution, and, therefore, Nevada citizens’ taxpayer dollars should not be used to pay to study how to violate our constitution. … I urge my colleagues to uphold their oath of office and vote no on ACR7.”
Instead of implementing wealth taxes, the state should focus on creating a more business-friendly environment that encourages investment and entrepreneurship, ultimately leading to long-term economic growth and prosperity for all Nevadans.
We want small businesspeople to aim high and grow their dreams. Why cap their ambitions? And if the Assembly members are serious about ‘modernizing the tax structure, I have plenty of ideas. Reach out.
Mr. Nohra is a venture capital investor and former candidate for governor of Nevada