AFL-CIO withdraw their support on the margins tax

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AFL-CIO withdraw their support on the margins tax

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Backers of a tax on businesses to fund education in Nevada are reacting to the state AFL-CIO coming out against the Education Initiative, also known as the margins tax.

Backers of a tax on businesses to fund education in Nevada are reacting to the state AFL-CIO coming out against the Education Initiative, also known as the margins tax.

The AFL-CIO is the latest to join an increasingly vocal opposition to the November ballot question. The tax would raise around $700 million annually for education by applying a 2% margins tax on businesses that gross more than $1 million. It's estimated the tax would affect about 13% of businesses, however, opponents says it would give Nevada one of the most onerous corporate taxes in the country.

Losing the AFL-CIO on this issue does carry more weight because the group had previously been in favor of the tax, but Ruben Murillo, who's president of the teachers unions--the ones pushing for the tax--says while it's disappointing, their key support ultimately lies elsewhere.

"We have supporters that come from grassrooots organizations, from the communities that they send their children to school, and we have some democratic supporters from the clubs. Look, 150,000 people signed this petition," Murillo says.

Murillo says this initiative has the same language as the one the AFL-CIO has testified in favor of in this past legislatives session and attributed this recent development to what he calls internal politics. Danny Thompson, who's with the AFL-CIO, says that's not the case.

"The whole idea of the bill that was at the legislature was that you take the little guy out of it and you only get the big people. That was the original concept that we were moving forward with." 

Thompson says, along with retailers, the building trades unions were concerned about the potential impact of the tax.

"Subcontractors don't have the ability to pass through costs like a general contractor and so many of the subcontractors came to them and just told them that, 'look, there's no way I can do this,''' Thompson says.

The ALF-CIO will convene again this summer, but Thompson doesn't expect those against the tax to change their stance, although there's a minority of unions that still favor it.