Fearing the margin tax

There may be a good reason the elites of the Nevada business community are so vehemently campaigning against The Education Initiative.

But it’s not what you think.

There’s certainly a reason you’re seeing billboards, TV ads, mail pieces and spokespeople endlessly parroting the line that The Education Initiative is a “deeply flawed,” “job-killing” tax that will cost the state business.

But what if it’s not the shortcomings of the tax that’s behind the anti-tax campaign?

What if there’s another reason the Las Vegas Chamber of Commerce, the Nevada Resort Association, the Nevada Mining Association and their allies of convenience in organized labor fear and hate this tax?

What if they hate it not because of its flaws (and there are a few) but because of its successes?

The Nevada State Education Association actually succeeded in writing a tax that the corporate elite of Nevada tried and failed to stop in court.

The teachers union had the unmitigated gall to succeed in gathering more than the required number of signatures in the various congressional districts of Nevada. And they went on to boldly champion the measure in the Legislature as lawmakers (especially Democrats) uncomfortably squirmed in their seats.

And now, having survived court challenges, legislative indifference and a campaign of more than $2 million spent against it, the voters are about to have their say on Question 3.

Could that be what Nevada’s corporate elite despises about The Education Initiative most of all?

The Nevada Legislature was long ago captured by the commercial interests that run the state — first mining, then railroads, then gambling, land development and general business. The cumbersome, Balkanized legislative process makes it easy to kill bills, especially with a majority of friendly lawmakers from both parties on your side.

The courts are a less certain prospect (after all, judges failed to stop the petition from going forward). But Nevada’s courts are generally quite friendly to business.

The executive branch? Gov. Brian Sandoval — who now pledges an earnest effort to reform the state’s tax system in 2015, predicting success where his predecessors have failed — is not exactly an independent. He’s come out squarely against The Education Initiative from the start.

But direct democracy? The people themselves? Well, that’s a frightening prospect for Nevada’s corporate elite, because the people are, at the very least, unpredictable.

Sure, people might buy the “deeply flawed” message endlessly repeated by opponents. (Does anybody doubt we’d be hearing the exact same words no matter what tax was proposed?) The public probably won’t remember how the same business elites have fought nearly every attempt to tax them, no matter the vehicle.

But then again, they might not. They might start wondering why the dry cleaner in Palm Springs, Calif., can pay his state’s corporate income tax, but the dry cleaner in Las Vegas somehow can’t, or shouldn’t. They might ask why the Ford dealer in St. George, the bakery in Phoenix or the insurance company in Boise can all pay, but their counterparts here must be shielded from paying their fair share for Nevada’s schools.

And that’s only if they pay; the tax won’t affect the vast majority of small businesses. Do you suppose the thousands of chamber members exempt from the tax might start to wonder why their group is spending $578,222 to fight a levy they’ll never pay?

If people start asking those uncomfortable questions, things could get quite ugly come Election Day. Why, for the first time in decades, business is looking at a tax it might actually have to pay!

So perhaps that — and not any legitimate shortcoming of The Education Initiative — is the real reason Nevada’s corporate elites are deploying every trick short of skywriting to stop The Education Initiative. They’ve succeeded so far because they dominate most every official forum of Nevada civic life.

But they can’t control the people. Let’s hope the people figure that out before the ballots are counted.

Steve Sebelius is a Las Vegas Review-Journal political columnist who blogs at SlashPolitics.com. Follow him on Twitter (@SteveSebelius) or reach him at 702-387-5276 or ssebelius@reviewjournal.com.