By Chuck Muth:
For the last dozen years or so, I have regularly attended the annual CPAC conference…the largest annual gathering of conservative activists in the country.
And I’ve actively encouraged others to attend, as well. Indeed, if you’ve never been to a CPAC, I still encourage you to make the pilgrimage.
But I’m passing this year.
It will still be a fantastic event, but it’s not the event I used to know…or that Ronald Reagan used to attend. For just a glimpse of what’s gone wrong, check out this column by Reagan biographer Craig Shirley…
John McCain’s presidential campaign manager from four years ago, Steve Schmidt, has compared the upcoming Conservative Political Action Conference (CPAC) to the “Star Wars bar scene.”
Reflecting on the dysfunctional 2008 freak show that passed for a campaign against Barack Obama, Mr. Schmidt would know.
The conference’s problem, for many longtime participants, is not the diversity and raucous freedom one might expect to find in a social club on an alien planet. The quandary is that what is now the largest gathering of conservative activists in the nation has wandered far from its original intent, which was a rejection of the status quo.
In the old days, the event represented the best intellectual revolutionary elements of the conservative movement. Panel after panel would argue and debate issues such as abortion, foreign aid, spending policies and about what the true Holy Grail of conservatism entailed – defending institutions or individuals?
The conference was always separate and apart from the GOP establishment, even in the Reagan years. Today it no longer represents a joyous insurgency but is instead part of the Washington political establishment.
Indeed, CPAC was as much about taking on the GOP statists as anything.
By Chuck Muth
On December 14, 2012, a gunman entered a public school in Newtown, Connecticut, opened fire, and killed six adults and twenty little children.
In the interest of the children’s “safety,” the school was a well-known gun-free zone. None of the adults, survivors or slain, were armed with the ability to shoot back to defend themselves, their colleagues or those innocent children. As such, all were proverbial lambs to slaughter.
Makes my blood boil.
Coincidentally, it was EXACTLY six years to the day – December 14, 2006 – that the Las Vegas Review-Journal published the following in a story:
“Students do not go on shooting rampages at schools where teachers are armed, state Sen. Bob Beers believes. As a result, the Las Vegas Republican said Wednesday that he’s preparing a bill that would permit teachers and other school personnel who complete a course on firearm safety to carry a gun while they teach classes.”
Then-Sen. Beers, now on the Las Vegas City Council, noted that “We have banned guns in schools in Nevada and most of the rest of the nation for the last 20 years” and yet guns are regularly confiscated from students on campus.
Then-Clark County School Superintendent Walt Rulffes told the newspaper that an armed school staff might make a school less safe. “The more people who have guns, the more likely it is that there will be a shootout.”
Oh, if only there had been a shoot-out in Newtown, where the defenseless victims would have had a fighting chance instead of being executed!
Then-school board member Sheila Moulton said of Beers’ proposal at the time, “I’m not for putting guns in the classroom even when teachers are trained on how to use them.”
Really? I wonder if Ms. Moulton would be willing to look in the eyes of the parents of those dead children and say that to their grieving faces today? In fact, I dare her to.
The simple fact is mentally deranged nutcases who are willing to slaughter innocent children aren’t going to be deterred by some ridiculous, paper-tiger gun control law. The only people who have guns taken out of their hands by gun control laws are law-abiding, unarmed victims.
And look, not everyone needs to be carrying a weapon to have a deterrent effect. A shooter who doesn’t know if someone might be carrying a concealed weapon has to think twice. The gunman in Newtown had no such worry. He knew going in that not a single adult in the building, the true first responders, would be capable of shooting back.
Bob Beers was ridiculed by many for his proposal six years ago. But he was dead-on right. It’s not time to ban guns; it’s time to ban gun-free zones.
By Chuck Muth
December 14, 2012
Pliable “Gumby” Republicans and the media are telling us, in light of last month’s election results, that GOP candidates must move to the mushy middle to win elections. Really?
Ronald Reagan was a conservative. He ran as a conservative. He governed as a conservative. And he won as a conservative. Twice.
George H.W. Bush (41) ran as a conservative; selling his candidacy as “Reagan’s third term.” He won as a conservative. Then he broke his conservative “read my lips, no new taxes” pledge and subsequently lost his bid for re-election.
Bob Dole ran as a moderate. He lost.
George W. Bush (43) ran as a conservative. A “compassionate” conservative. The “true” heir to Ronald Reagan, we were told. He subsequently governed like a moderate on many issues (No Child Left Behind, Medicare Part D, TSA, etc.), but at least talked like a conservative, cut taxes like a conservative and ran for re-election as a conservative.
John McCain has always been a moderate. Voted like a moderate. Ran as a moderate.
And lost as a moderate.
Mitt Romney governed as a moderate in Massachusetts. He then ran as a “severely conservative” Republican in the GOP presidential primary this year. He won the primary, but no true conservative believed he was really one of us. We all knew he was, in his heart of hearts, a moderate.
Here in Nevada, John Ensign ran statewide as a conservative. Voted as a conservative. And won. Until he was caught doing…well, you know.
Dean Heller ran as a conservative for Congress. Was elected as a conservative. Voted as a conservative. Was appointed as a conservative to replace Ensign. Voted as a conservative in the Senate. Ran as a conservative this year. And won.
Jim Gibbons ran as a conservative. Governed as a conservative. Talked like a conservative. Then lost. Not because he was a conservative; but because he horribly mismanaged his administration.
Indeed, note that Gibbons didn’t lose to a Democrat; he lost in a GOP primary to Brian Sandoval, who beat him by…running as a conservative.
Sandoval, like Romney, was always suspected of being a moderate. And, disappointingly, he’s governed as a moderate after fooling enough Republicans into thinking he was a conservative. Only time will tell if he can continue fooling enough of the people to get re-elected with a limited-government Libertarian and/or an IAP candidate in his race.
Joe Heck ran as a conservative in 2010 and won in a Democrat district against a sitting Democrat incumbent. He then voted as a conservative in office. Ran as a conservative again this year in a Democrat district. And won.
So, um, tell me again why Republican candidates MUST move to the center in order to win elections?
By Chuck Muth
The GOP record is intact. Republicans never blow an opportunity to blow an opportunity. And faced with the biggest failure of a president since Jimmy Carter, Republicans blew it.
Or, I should say, establishment Republicans blew.
You know, the same fine folks who gave us Bob Dole and John McCain before forcing Mitt Romney on us because he was the “electable” candidate.
How’d that work out us?
The only good news here is that there is no clear “it’s his turn” heir for the 2016 GOP nomination.
But this wasn’t just a Romney loss. Republicans got spanked up and down the ballot from sea to shining sea. There hasn’t been a slaughter like this Wounded Knee. Just a few lowlights:
Presented with a choice between a liberal northeast Republican and a liberal northeast Democrat, liberals in Massachusetts opted for the real deal. Republican Sen. Scott Brown is a senator no more. Go figure.
In Connecticut, Republican Linda McMahon’s last minute plea to voters was: Vote for the Democrat for president, but me for U.S. Senate. Instead, voters opted to go with someone from the president’s own party. Go figure.
In Indiana and Missouri, voters opted not to elect to the U.S. Senate a pair of Republicans – Richard Mourdock and Todd Akin – who would force raped women to bear the children of their rapists. Go figure.
Former governors George Allen (Virginia) and Tommy Thompson (Wisconsin) went down in flames.
And in races featuring rising-star conservatives, both Rep. Allen West in Florida and Mia Love in Utah came up short.
One of the few bright spots for the day: Republicans appear to have regained control of the state senate in Wisconsin after losing it just a few short months ago in that organized labor effort to recall Gov. Scott Walker.
But not much else to cheer about.
I’ll look closer at what happened in Nevada – equally ugly – later. But to all those Republican candidates who decided not to run on a platform of not raising taxes because they thought Democrats and independents want tax hikes, I give you the results of a trio of tax hike ballot questions:
- 2/3 of voters voted against a proposed tax hike to fund school repairs in Clark County.
- A tax hike to fund libraries in Henderson went down by ten points.
- And in Carson City: A whopping 68% of voters said “NO!” to their own library tax hike question.
Republican voters. Democrat voters. Independent voters. All said, “Read our lips; no new taxes!”
Think Gov. Brian Sandoval and other GOP “leaders” will get the message now?
Final thought: Thank goodness Romney didn’t win the popular vote. Had he, WAY too many Republicans would have embraced the suicidal notion of eliminating the Electoral College and moving to a national popular vote for president.
Gee, in a “popularity” contest, who do you think will win: The candidate who promises you ice cream with every meal…or the candidate who tells you to eat your broccoli?
Oh, and how much time will presidential candidates spend in a little state like Nevada when the game will be decided in big states with big populations?
The Founders founded the Electoral College for a reason. Nevada Republicans would be insane to support doing away with it.
That is all.
By Chuck Muth
In Holland, Michigan this summer, Reason.com reports that “13-year-old Nathan Duszynski wanted to make some money to help out his disabled parents – his mom has epilepsy and his dad has multiple sclerosis. So he decided to open a hot dog stand. He saved $1,200, mostly money made by mowing lawns and shoveling snow.”
You know where this is going, right?
Yep. The local government shut him down before he ever had a chance to sell even his first hot dog, even though young Nathan obtained the proper license. You see, the city “bans food carts in the (downtown) area in order to minimize competition for the eight restaurants a couple of blocks away.”
Nice lesson to teach our kids about entrepreneurship, huh?
Unfortunately, this is no isolated example. Indeed, the government’s war on street vending is at a fever pitch right here in Nevada.
Recently the Clark County Commission passed new rules regulating street vending on the Strip which resulted in 16-year-old Bill Winkler – who’s been selling bottled water to tourists for two years in an effort to save money for college – being shut down and threatened with arrest.
Meanwhile, the City of Las Vegas is mulling new regulations prohibiting food trucks from operating within 800 feet (more than two-and-a-half football fields) of an existing restaurant – not for health and safety reasons, but to “protect” brick-and-mortar establishments that simply don’t like competition.
As Chicago food truck operator Matt Maroni so rightly points out, the government doesn’t prohibit McDonalds from opening up across the street from a Burger King. It’s outrageous.
“They (restaurants) want to blame food trucks for their problems,” explains Doug Porter, owner of the Curbside Café food truck in Las Vegas. Indeed, why should a restaurant owner worry about better marketing, better food, better service, greater variety and lower prices when he can just get the government to ban competitors, right?
Government policies should be promoting entrepreneurship, self-sufficiency and job creation…not serve as the enforcer for a mob-like protection racket for existing businesses that don’t like competition from newcomers.
“In large part because of the low start-up costs, street vending offers entrepreneurial opportunities to those on the first rung of the opportunity ladder,” notes the Institute for Justice. “This is especially true for minorities and immigrants often shut out of starting traditional businesses due to high capital requirements and complicated, ever-expanding government regulations.”
Las Vegas City Councilman Bob Coffin supports the proposed prohibition on food trucks operating within 800 feet of an existing restaurant, wondering why the government should “permit” such competition – even though the competition is properly licensed and in full compliance with all health and safety regulations.
That’s an easy one, Councilman. Because this is America.
By Chuck Muth
Nevada U.S. Sen. Dean Heller took to the floor of the Senate yesterday and had a thing or two to say about tax hikes:
“President Obama said in 2009 – quote – ‘You don’t raise taxes in a recession… because that would just suck up, take more demand out of the economy and put businesses in a further hole.’ I agreed with that statement in 2009, and I agree with it today. … My home state of Nevada leads the nation in unemployment at 11.6 percent. … Raising taxes will do nothing to create jobs in Nevada or this nation.”
Darn straight, Skippy! And yet…
The Nevada Legislature, with plenty of Republican accomplices, “temporarily” raised taxes in the neighborhood of $800 million dollars – over the objections and vetoes of then-Gov. Jim Gibbons – during the height of the recession in 2009.
That same Nevada Legislature, again with plenty of GOP accomplices, re-imposed $620 million worth of those “temporary” taxes – most of which hit Nevada job creators – in collaboration with Gov. Brian Sandoval in 2011 during the ongoing recession and while Nevada was leading the nation in unemployment.
Then just this past March – as Nevada continued to lead the nation in unemployment – Gov. Sandoval announced he was going to once again re-impose that $620 million worth of “temporary” tax hikes on Nevada’s job creators next year despite the fact that, as Sen. Heller pointed out, “raising taxes will do nothing to create jobs in Nevada.”
Now, some liberals in the media would have you believe that it’s only radical right-wingers like me, the tea partiers, the Ron Paulbarians and our good friends over at the Nevada Policy Research Institute (NPRI) who believe that raising taxes, especially during this seemingly never-ending recession, is bad policy and won’t help create jobs in Nevada.
But the truth is, our position is the responsible, mainstream conservative position…and thank you Sen. Heller for sticking to your guns and sticking up for Nevada’s taxpayers and job creators!
While Sen. Heller opened his remarks by quoting President Obama from 2009, let me close with a far more eloquent quote from gaming executive Steve Wynn, also from 2009:
“This is a time – anybody that raises any taxes now is purely psychotic. I mean, every time they touch a tax now you can just increase the unemployment line at the Culinary Union and at every place else in this city. No, no. This is a bad time to raise taxes.”
Darn straight, Skippy!
Fiscal conservatives agreed with that statement in 2009, and we agree with it today. Perhaps Gov. Sandoval might rethink the wisdom of again re-imposing that $620 million “temporary” tax hike next year and join the rest of us mainstreamers.
* * * * * * * * * * * * * * *
Chuck Muth is president of CitizenOutreach.com and founder of CampaignDoctor.com. He blogs at MuthsTruths.com
Chuck Muth recently interviewed Jeff Ecker, general manager of Paymon’s Mediterranean Café in Las Vegas about doing business in Nevada.
Chuck: Jeff, thanks for being with us today.
Jeff: Thanks for having me, Chuck.
Chuck: Now the main issue facing the restaurant industry in particular here in Nevada is this food tax that the Tax Commission has decided to levy against restaurants who give away food, I guess gifts or benefits to customers, as well as meals that you provide to employees that the employees don’t have to pay for. Tell me a little bit about the background and the history of that tax and bring us up to speed on that.
Jeff: Well, originally this was a special use tax that was levied on businesses and it was struck down a few years back. Presently there’s some litigation going on between some of the larger hotels, casinos in Las Vegas. And what they are asking for is to be paid back all the taxes that they had actually paid to the state when they did provide the employee meals and comps for customers. So now [the Tax Commission has decided] that this is no longer valid as a special use tax but it’s valid as a sales tax.
Under this new code, the businesses that are providing free meals to their employees will have to assess the cost of the meals, and they will be taxed based on that. And any business that comping meals will also be subject to the same type of tax.
Chuck: So we’re talking about two different things here. Let’s start with the employee meals. That’s kind of a benefit in the restaurant industry. If I remember, your employees come in and they’re going to work the dinner shift that starts at say 5:00. The employees have to come in and get ready for the evening shift, around 3:00, 3:30. And when they come in, the kitchen usually provides a meal for the employees for that day. And the meal is given to the employees for free. So there’s no sale of any meal.
I don’t quite understand. How is it that the Tax Commission is charging you the restaurant owner a sales tax on a sale that isn’t being made. That’s really an expense of doing business isn’t it?
Jeff: Yes, that’s a really good question, Chuck. I think back to my days in running the restaurant at Cornell University Statler Hotel, when I was in charge of actually the employee meals program. Much of the food that was offered to our employees for meals was going to be discarded. This was food prepped or cooked in the three restaurants that were within the Statler Hotel. And likewise, many of the hotels and larger restaurants, even the smaller restaurants, sometimes over prep. Sometimes we have leftovers. It’s all good. It’s healthy. It’s in good shape and it’s provided to employees free of charge. And, unfortunately, now businesses have to make the decision whether to continue with offering these meals or pay the price or pass it on to the end user, which would be employees.
Chuck: And, in this case, they’re assessing you. The tax will be assessed on the cost of the meal, not the retail price as if you were selling it to a customer, is that correct?
Jeff: Yes, that’s correct. It’s actually based on the food cost. And in attempting to tally that, it will probably be more time consuming and just as costly as selling it at the retail price, to be honest.
Chuck: On the other side of this coin are meals that the restaurant gives away to its customers. It could be a promotion. It could be an inducement to get people to come into the restaurant - buy one dinner, get one dinner free - which the restaurant industry has done for years in order to get new customers to come into the restaurant. According to the Tax Commission ruling now, you didn’t pay sales tax on meals that you gave away. Now you have to pay the sales tax on the retail value of those meals. Is it the full meal or any menu item that is given away?
Jeff: It’s my understanding that it’s any menu item that’s given away because it’s considered a comp, it’s free. And that really is really confusing to me as well because in the restaurant industry, we use those types of enticements as advertising. It’s not much different than spending your entire budget for one year, which could be 3% or 4% of your typical gross sales on advertising. You know, it’s just another method of advertising to get people to come in to either try your food or to let them know we really appreciate their business.
We incur the costs of the food, so we’re already paying for the food, and we’re taking a loss on that because we’re giving it away. But we’re doing that as a goodwill measure to make sure that people come back and so we can sustain ourselves with all the competition that’s out there. So, yes, it’s quite a measure that I can’t really understand.
Chuck: Back to the example you were giving before with employees… At the end of the night you’ve got food that wasn’t sold and I know restaurants donate that to shelters ad food kitchen that sort of thing. Are you under the understanding that now you’re going to have pay tax on food that you might donate to a homeless shelter or food kitchen?
Jeff: Yes, I don’t see any difference between an employee and a homeless person, honestly. I don’t see the difference. We’re giving the food away. We’re giving it away as a measure of goodwill. And the fact of the matter is, if that food is going to be taxed to the homeless shelters and such, I doubt very highly that businesses would consider engaging in that anymore. Businesses are doing this while at the same time barely hanging on because of the economy. So to be penalized for giving something away to those that maybe can’t afford food or are less fortunate, I think that’s going to devastate the homeless shelters.
Chuck: Just to be clear on this, if a customer buys a meal and is charged sales tax, the customer pays the tax. What we’re talking about now is a customer who doesn’t buy the meal is still going to be charged a sales tax. So either the restaurant has to eat the sales tax and pay that out of the restaurant’s own pocket, or you have to give away a free meal but still give the customer a check for the sales tax that’s owed on it. Is that correct?
Jeff: That’s correct. And I can pretty much guarantee you that the restaurants are not going to insult the customer by doing that. If they felt that it was worth giving the food away in the first place, then they’re going to wind up paying the tax themselves. But I have to tell you that when it comes to the larger operations, maybe the casinos, the hotels, and they’re giving away much more than the smaller businesses, then it becomes much more difficult to assess and to continue doing business in that way.
Chuck: Aside from the fact that this will actually be a direct tax on the business, unless the business opts to insult its customers and hand them a check just for the sales tax on their free desert, from a regulatory standpoint and a compliance standpoint, how difficult is this going to be? Or is it fairly easy to track free meals and calculate the sales tax owed and remit it? Is this going to be a nightmare for businesses or is this something that is not going to be that difficult really to comply with?
Jeff: The method of compliance is actually not that difficult. That is fairly easily tracked through any point of sales system that’s of a leading nature like your Micros, InfoGenesis, Squirrel, those types of systems. Although the employee meals is a whole another situation. That’s much more complicated and much more time consuming.
Chuck: To bring us up to speed again on the legislative aspect of this, for the meals that were given to employees and free meals, complimentary meals to the customers, the hotels and restaurants were charging a use tax or were being charged a use tax and remitting that to that state. I believe it was the Nugget Casino in Sparks that challenged this practice and said they shouldn’t be paying a use tax on the comps. And the court kind of split the baby here and said that’s correct. This is not a use tax; however, it could be construed as a sales tax. But the legislature, and again correct me if I’m wrong on this, Jeff, the legislature did not address that court ruling and left it open rather than defining whether or not it was the sales tax that was due. And absent legislative action, the Tax Commission has now ruled unilaterally, without legislative approval, that this is something that you guys have to do. Is that correct?
Jeff: That’s exactly what’s happened. And you know they pretty much rushed into this without getting the legislative ruling on it and, from what I understand, their stance is to remit any back monies that were assessed if the legislature strikes it down. But many of the operators feel that once that money is given to the state, they’re never going to see it. It’s never going to come back to them. And what the operators can’t understand is why they would have rushed into something like this without getting legislative approval.
I have to tell you, Chuck, there’s something that hasn’t really been brought up by other people but our hotel industry, the casino industry in Las Vegas, when you think about this, and being taxed for comping players who are gambling. Las Vegas and Nevada, we are in competition with so many other jurisdictions around the country and globally for the gaming dollar. And when operators are taking on these heavy burdens of taxation, and they no longer can comp in the way that they were used to, to bring the people into Nevada, then other jurisdictions lined up are better situated because they’re comping away items without any repercussions tax-wise. So this is not a good situation for Nevada.
Chuck: And as far as the Tax Commission is concerned, they have begun assessing you the tax as of this past I think, middle of February.
Jeff: That’s right.
Chuck: So the meter is running like a taxi cab. You’re being assessed, that tax is being accumulated and they’re saying this is what you owe. But you don’t actually have to remit it until, from what I understand, either the legislature acts or a definitive court case either upholds or strikes down this tax. Is that correct?
Jeff: Well, that’s my understanding. But you know we just went through an audit from the Department of Taxation. And the person that was doing the auditing said that some of the larger businesses, such as casinos, were already complying and remitting payments. So I’m honestly not sure who to believe on that. From what I understand, we have until the middle of, I believe, July or August, but from what the auditor said, the big companies were already complying. So I’m honestly not sure.
Chuck: The other big issue that’s come up recently was the United States Supreme Court has ruled that Obamacare is constitutional as a tax for folks who don’t buy insurance. It’s a penalty if you don’t have health insurance. If Congress does not overturn Obamacare, and it is implemented and goes into affect, tell me how that’s going to affect you. And before you do that, explain exactly what size restaurants [will be affected] so people get an understanding of the size of Paymon’s Mediterranean Café and how Obamacare factors into your operations?
Jeff: Paymon’s Mediterranean Café has two locations, and we have about 80 employees total. We’re like many of the other restaurants in town, we all find ourselves in the same position, especially if we have more than one location. If you have more than one location in a casual restaurant, usually you’re looking at having 80-120 employees. And where that puts us with Obamacare is that if we were to offer insurance to our employees, it would cost us about $250,000 a year. If we don’t offer the insurance to our employees, which is Option 2, we would pay roughly $100,000 and the penalty tax. Out of the 80 employees, the first 30 are exempts, which leaves us 50 employees, which would lead to $100,000 tax penalty. Option 3 is to close down, which unfortunately right now as it looks, that’s the option that we would have to choose unless a miracle happens. If it’s not repealed, we don’t have $100,000 per year to pay, especially when one of our locations is at that break-even point and has been for the last seven or eight quarters.
As a small business, it’s not uncommon to have 80 – 120, or even 140 employees and it’s going to be devastating to any of the businesses with multi-locations and franchisees who have several locations. Because now it no longer makes sense to operate more than one location where you get the 30 person rebate exemption.
Chuck: And so none of the employees that Paymon’s now have health insurance. They have to go out and get their own individual policies. But once this Obamacare program kicks in full force, if they don’t have their own personal insurance, then you pay the penalty. I mean what if you hire employees and they have their own personal insurance. Do you still pay a penalty on them?
Jeff: It doesn’t matter.
Chuck: If you provide the insurance?
Jeff: No, from what I understand, it’s that we are assessed the penalty for every employee that’s not insured by us. And sadly, sadly, the scenario is that most of our employees are actually covered by their spouses, or on their parent’s insurance, and we would still have to face this type of a penalty. And at the same time, they would wind up paying and buying the individual mandated insurance as well.
Chuck: So if you don’t provide the insurance, then every employee that you have, you have to pay a penalty for. If that employee does have insurance through a spouse’s health insurance program, then they’re covered anyway. You’re penalized whether they have insurance or not. But if they don’t have any insurance whatsoever, then they’re put into the new national health insurance program that the penalties I guess are supposed to pay for. Is that your understanding of how this going to work?
Jeff: Well my, understanding is that we pay $2,000 per employee that we are not paying the premium on insurance, private insurance premiums for. So even though they have insurance through their spouses, we would still be on responsible for every single employee that we employ.
Chuck: Let’s say you were insuring all of your employees and you were paying $250,000 a year for health insurance. And now all of a sudden, this Obamacare program comes into effect, and you have a choice of either continuing to pay $250,000 a year knowing that it’s going to escalate year after year also. Or be assessed the penalty, which is going to cost you $100,000 a year. Does it make sense for any business to stay in the private health market rather than just except the penalty and not insure any of their employees?
Jeff: For small- to medium-sized businesses, it makes absolutely no sense to continue insuring employees with private health insurance when you can pay the $2,000 penalty. Now for large businesses, it’s a different story because with very, very large businesses, they use insurance and benefits as an attraction because they’re in competition for skilled labor and that type of thing. But when you’re looking at small- to medium-sized businesses, my educated guess is that you would take, you would go ahead and pay the penalty and your employees essentially would still be insured through the national program.
Chuck: Okay, let’s switch to another topic. Talk to me a little bit about unemployment and two other areas I’d like you to address. One is the unemployment tax and I believe it has gone up this year to pay for higher unemployment benefits that the federal government has extended for long term unemployed. And two, just tell me a little about what you may or may not perceive as abuse of the unemployment system and how that impacts businesses.
Jeff: Sure. Last November, I was at the unemployment tax hearing and they basically assessed a 2% increase in unemployment taxes for businesses. And that was mainly due to the extension of the federal mandate of extending unemployment in which the states then were forced to borrow money from the federal government. And in order to pay that money back with interest, it put states in a situation where they had to increase the unemployment rate, the unemployment taxes. In the restaurant industry, these costs can be quite expensive because the more turnover you have in your industry, the higher ratios that you actually have to pay. The modifier becomes higher because you’re going to have more unemployment claims as you have higher turnover.
That brings me to the situation of unemployment abuse. And unfortunately in this state, there’s a lack of checks and balances, so much so that it really hurts businesses. You have people who can claim unemployment even though they walk off the job. They can make false allegations of sexual abuse. There’s a multitude of things that happen when people get terminated, walk off the job.
And unemployment’s stance essentially is that if an employee hasn’t done something egregious, if they haven’t broken a law, then in this state they’re going to wind up getting unemployment. And every time a business incurs that situation where their employees are able to get unemployment, their modifier goes up, which means that they’re going to be paying more unemployment tax.
The few times that we’ve had to deal with the unemployment division, it was like an interrogation against us. When we found people doing things [they shouldn't], where they caught red-handed, such as theft and, the system is geared toward the employee in the unemployment process. If the employee doesn’t show up for the first hearing, and the business shows up to represent themselves, then another hearing is set. There’s no penalty for not showing. They can call in, yet we have to be there. If we want information, their statement, we have to physically go down to the unemployment bureau within 24 hours of the hearing, which means you have to go down and gather the information to see what the employee said. And then you have to turn around within 24 hours and go back to the hearing. So it makes it very difficult for businesses. And so I’m sure many businesses during the process of appeal just don’t have the time to deal with it, and they wind up losing the case and then paying higher taxes.
Chuck: Does the business pay that tax directly or is that something that the employee pays through payroll deduction out of their paycheck?
Jeff: As far as the unemployment tax?
Jeff: That’s considered a payroll tax that we have to pay quarterly.
Chuck: Okay, it’s not something that you deduct out of the employee’s paycheck where the employee is actually the one that’s paying the …?
Jeff: No, no, no. The 2% tax hike was on businesses.
Chuck: One more area I’d really like to touch on. Tell me how the government mandated minimum wage and overtime rules and regulations impact. And let’s just stay with the restaurant businesses in particular.
Jeff: In the restaurant industry, it’s common for tipped employees to be paid minimum wage because they make a certain amount of income from the tips. The basic minimum wage is that for service industry employees. Now in the restaurant industry here in Nevada, essentially the only people that get paid minimum wage are tipped employees. We can’t possibly employ people for minimum wage in other positions. We can’t pay dishwashers and cooks and hostesses and busser’s minimum wage. We wouldn’t be able to staff our establishments. So essentially the minimum wage is geared for the tipped employee. They make five to six times the amount of money that non-tipped employees make because of their tips.
As the minimum wage keeps increasing, it simply goes to the people making the most money in the restaurant. What that does to an establishment is that it handcuffs them when they want to give a raise to a hostess or a cook or a non-tipped employee. They no longer have the financial wherewithal to do that. Then it becomes difficult to attract employees, such as cooks and dishwashers, when you don’t have the money to pay them.
Ultimately, what’s going to happen in the restaurant industry is that slowly you’re going to see cooks, hostesses, dishwashers and other staff wages going down to the minimum wage because the minimum wage keeps rising. So there’s really no equity in the race of the rising minimum wage.
It really hurts the youngsters coming out of high school, out of college. Businesses now are looking for more seasoned professionals that we don’t have to train for six months for that same wage. So minimum wage has really put a damper on operations. It’s caused us to have to lay people off. It’s caused us to stop any raises. For instance, since the economy has slowed down in 2007, we haven’t raised the base rates for these positions. They’re completely stagnant. And as minimum wage continues to rise, those positions are going to wind up having to be paid less and coming down to the minimum wage at some point in order for restaurants to survive.
Chuck: Now on the overtime issue, let me lay this out and tell me if I’m correct or incorrect and let me know how this affects you. Most people understand that there is a 40-hour work week. And if an employee works more than 40 hours, they’re paid time-and-a-half for overtime. A restaurant can be open 24 hours a day. It could serve breakfast, lunch and dinner. Let’s say you have a waiter working an 8-hour dinner shift on Tuesday night. And then the restaurant schedules him to come in and work the breakfast shift the next morning. That is now more than 8 hours in a 24-hour day and rather than calculating the time weekly and you have to pay time-and-a-half on the extra hours worked above 8 hours within a 24-hour time period. Is this correct? Is that the way it works now?
Jeff: Yeah, that’s actually correct. The federal law is 40 hours in a week. The Nevada state law is more than 8 hours in a day. Bu to make matter much worse, it’s not just 8 hours in a day, it’s 8 hours in a 24-hour rolling period, which makes it extremely difficult when you’re talking about restaurants and trying to staff properly because as we all know, business could be slow one day and very busy the next. Sometimes a person would have to work dinner and then they would be called in for lunch the next day. And now instead of employees switching shifts or whatever, it’s automatic overtime.
And speaking with Catherine Jacoby, President of the Nevada Restaurant Association, she made a really good example with last year concerning Burger King and they were supposed to come in and bring in a whole slew of Burger King’s in the town. And that was the one ruling that stood between them coming here and them staying away. So that is a rule that just makes it almost impossible to operate in the restaurant industry.
Chuck: Let’s touch on this – all the politicians that are in office today and all the candidates who are running for office, are running on the number one issue, which is creating jobs, reducing unemployment. What is it that government and these elected officials could do to help you and your type of business to be able to hire more employees? Is there anything that the government can do that it’s not doing, or should do or stop doing to make it easier for you to hire more employees?
Jeff: The government can, first of all, stop their aggressive behavior when it comes to the fees and the taxes and the social programs, because what’s happened is businesses have gone into a stall. They were waiting to see what was going to happen with Obamacare. The private businesses are seeing too many disincentives right now. They need to incentivize business. Potential business men and womenwho would possibly go into business now are faced with these types of fees. And they are a disincentive to go into business.
The other thing is, Chuck, what banks are going to loan money to start-ups now when you can shave $100,000 or $200,000 off your bottom line because of Obamacare? Do you think the banks are going to loan money to these people to get into business now? They’re not loaning now to profitable companies who want to expand. The money has tightened up.
Government and our elected officials need to regress from all of the fees and unnecessary taxes that we’re paying because we’re at a breaking point, and if they don’t recognize that, it’s going to be too late. The private business man can not declare chapter 11 and stay in business. Once his credit is ruined, he is out of the game, and there is nobody to come in behind him or her in this economic situation where money is so tight in the banking industry.
Our elected officials need to get on the ball and come up with ideas to create jobs, not push businesses out of business, and that’s what’s happening right now. Businesses are collapsing as we speak.
Chuck: And how about from a compliance and regulatory perspective, what is it that the government could do to ease the burden? Are there things as a business person you have to comply with the government that is completely unnecessary that they ought to just drop to make things a little easier for businesses to operate and actually start up businesses?
Jeff: Well, the modified business tax is a good example. It’s essentially a gross sales tax, which hampers our ability to stay in business. And the fees that we have to pay to the fire department every year now. We have to draw plans to show what the inner workings of our restaurant and dining rooms on an annual basis now. The Health Department - every time they come in and give you a B or C rating, it costs $450. You’re going to see those C ratings all over the place now. I’m hearing from other operators that for the first time they’re getting hit with C ratings, which is $400 – $450 out of your pocket to be reinspected.
These are the things that have to stop. The fees and regulations and the permits. If you have businesses in multiple jurisdictions within Clark County and Henderson and the City of Las Vegas and the county and North Las Vegas, you have the identical operation. You have to submit plans every single time, identical plans to each jurisdiction, duplicates.
Chuck: And, last question, you mentioned the modified business tax. For those who don’t know what the modified business tax is, explain that and what should be done with that tax if anything at all.
Jeff: Basically, it’s a payroll tax that is levied upon businesses based on their gross sales. And the problem with that is gross sales could be astronomical and a company could still be loosing money. That tax money is coming off of the top. It’s not coming off the bottom after you have your profit and loss statement. Essentially you’re paying it before you’re paying anything else. And it’s just another way of taking money from business.
It’s not much different than what the Water District pulled a couple of months ago when they levied medium- to small-sized businesses with the bulk of the increase. It has collapsed several businesses already.
Chuck: With the modified business tax though, what I’ve heard is that they’ve exempted small businesses. It’s a fee that’s charged per employee that you hire but small businesses don’t have that fee. Is that your understanding?
Jeff: That’s very small business. You’re talking about businesses that are doing $250,000 and over. I mean most businesses are doing more than $250,000 in sales. So what they do is they exempt the first $250,000 in sales is all. And after that, the tax can be quite astronomical depending on what your sales are.
Chuck: So it’s gross revenue, not net.
Jeff: Exactly. Exactly.
Chuck: Anything else you’d like to share with us on how difficult or easy or helpful the government makes it to do business in Nevada these days?
Jeff: Well, it’s very difficult. I just will close by saying that not only are the local businesses severely hurting right now, but other states are looking at us and saying there’s no way I would want to put a location in Nevada. And most of the restaurant operators here in Nevada that have expanded in the last two or three years have done it out of state. They have gone to Arizona. They’ve gone to Texas. They’ve gone to other states that are much more business friendly.
From Nevada News & Views
by Chuck Muth
In a recent campaign speech attacking entrepreneurs and business owners, President Barack Obama scolded these job creators by saying they couldn’t have made it without the help of government.
“If you’ve been successful, you didn’t get there on your own,” the president said. “If you’ve got a business — you didn’t build that. Somebody else made that happen.” To which Jack Gilchrist, owner of Gilchrist Metal Fabricating Company, responded in a new Mitt Romney ad:
“My father’s hands didn’t build this company? My hands didn’t build this company? My son’s hands aren’t building this company? Did somebody else take out the loan on my father’s house to finance the equipment? Did somebody else make payroll every week or figure out where it’s coming from? President Obama, you’re killing us out here. Through hard work and a little bit of luck, we built this business. Why are you demonizing us for it? We are the solution, not the problem.”
Indeed, if politicians really wanted to create jobs, they’d bear in mind this famous quote: “You cannot lift the wage earner by pulling down the wage payer.” And yet, pulling down the job creators is exactly what government does over and over and over again. Some recent examples:[list type="arrow"] [li]
- Nevada Secretary of State Ross Miller did an end-run around the Legislature to repeal by fiat an exemption from the state’s anti-business business license fee for some 60,000 small, home-based businesses that tried to protect themselves from slip-and-spill ambulance chasers by incorporating.
- In a recent transportation bill, Congress, at the bidding of Big Tobacco, essentially put out of business hundreds of small do-it-yourself/roll-your-own cigarette operations, sending thousands of workers to the unemployment lines.
- The Nevada State Tax Commission, without legislative approval, recently declared that restaurants have to begin remitting sales taxes on meals they give away to customers, charities and employees. Think about that: Restaurants now have to pay sales tax on items they didn’t even…SELL!
- The Clark County Commission told Dotty’s Taverns that it had to install bars with poker machines built into them even though Dotty’s customers prefer to sit at stand-alone poker machines on the floor. Nevertheless, the Commission forced Dotty’s to retrofit its stores, at the cost of millions of dollars, RETROACTIVELY.
- Meanwhile, the Reno City Council is considering “creating an origination fee on new alcohol related business license applications and an increase of up to 100 percent (100%) on alcohol license fees.” A 100% tax increase!
So to be fair, it’s not just Barack Obama who is killing small businesses; it’s a combination of ill-informed elected officials and over-zealous government bureaucrats. If you really want to create jobs in America, don’t turn to government; turn to people who have actually done it.
By Chuck Muth:
Now, before some of you get your feelings hurt, let me explain…
For me, I made a conscious decision last fall to strategically change directions in my political/public policy work. Here’s the lowdown.
I’m part German and part Irish. As such, believe it or not, I can be a little stubborn and hard-headed sometimes.
No, no…it’s true!
But after running into a brick wall for the last 20 odd years, I’ve finally come to my senses and reached two conclusions:
1.) You can’t take moronic wheel-is-turning-but-the-hamster’s-dead/few-fries-short-of-a-Happy-Meal boobs like Assemblyman Mark Sherwood and turn them into a thinking, sentient elected officials. You have a better chance of slapping the proverbial lipstick on a pig and having the pig win the Miss America pageant.
2.) You can’t take an “electable” moderate candidate and make them into a conservative elected official – especially after the big-money special interests get their claws in them. Exhibit A: Gov. Brian Sandoval.
So the only other option is to help informed, intelligent, principled conservative candidates become more electable because…let’s face it, if you want to change public policy, the only way to really do it is to change public officials.
And no, it’s not enough to simply elect more Republicans regardless of what they believe – as State Sen. Michael Roberson advocates. You have to elect better ones, as well.
As such, I decided to go back to my roots and restart the candidate training programs I was doing all across the country before my first daughter was born in 2000.
In fact, I just finished organizing a full-day candidate training seminar for the Libertarian Party at their national convention in Las Vegas a couple weekends ago…and I’ll be speaking again at the Campaigns & Elections annual conference in Washington, DC next month.
But there was a problem…and something had to give.
Social/electronic media – in my case, primarily Twitter and email – is wonderful. But it can also become addictive. As such, it can eat up hours upon hours upon hours of your time that could otherwise be used for more productive activities or spent with family and friends.
I’m embarrassed to say, I got hooked. And didn’t even realize it was happening.
You know…if it was only an hour or two of wasted time a day – with weekends free – that’d still be bad, but not as bad as I had it. For me, I probably spent at least a good 4-5 hours a day minimum just reading and responding to emails and tweets. Seven days a week.
That’s almost as much time as a full-time job!
Seriously…I’d go to bed and wake up 7 hours later and have 127 emails in my inbox. It was insane!
And not one of them put a dime in my pocket, food on my table or clothes on my kids’ backs.
Thank God they don’t wear shoes! (That’s an inside joke for long-time readers.)
Nor did any of those emails or tweets help make conservative candidates more electable…which is now the goal.
(Pause. Taking a break to take the dog for a morning walk…something else I’ve been neglecting to do for a long, long time.)
(OK, I’m back…)
So two months ago I began to slowly wean myself from the Matrix.
I stopped reading the newspaper cover-to-cover every day.
I began unsubscribing from some email newsletters.
And I “un-followed” some people on Twitter…which caused a bit of a problem here at home. You see, one of the people I stopped “following” was my 9-year-old daughter, Jenna, whose feelings were considerably hurt. So I had to immediately “re-follow” her.
To make a long story short, I attended a 4-day coaching/speaking/marketing seminar this past weekend in Los Angeles and came to the conclusion already reached by the seminar host, James Malinchak, that it was time to go “cold turkey.”
So I “unfollowed” all but three people on Twitter:
(1) My own @CampaignDoctor Twitter account – in case I want to re-tweet something there that I think my general Twitter followers might be interested in.
(2) My daughter Jenna – for the obvious reason!
(3) And Las Vegas Review-Journal political columnist Steve Sebelius.
Steve’s now my political “lifeline.” He doesn’t tweet excessively for ego-boosting gratification the way some other self-absorbed pundits do. And I figure if something happens in Las Vegas, Nevada or Washington that’s important enough for Steve to tweet about, it might be important enough for me to read about.
In any case, if I’ve unsubscribed from your e-newsletter or un-followed you on Twitter, PLEASE don’t take it personally.
It’s not that I don’t value your opinions or want to read about your issues. It’s that there are only so many hours in the day…and I need to spend more of them reading my kids’ essays and homework…as well as e-newsletters on ways to help make conservative candidates more electable.
So I’m no longer waking up every morning and spending hours reading The Hill, the Wall Street Journal Online and Neal Boortz.
Instead I’m reading Dan Kennedy, Kevin Gentry, Katya’s Non-Profit Marketing, Robert Skrob, MaryEllen Tribby, Ryan Deiss, Future Fundraising Now, Bob Bly and Joe Polish.
“Who?” I hear you collectively ask.
Exactly. They’re not conservative activists. They’re not candidates or elected officials. They’re not party or think tank leaders. They’re not political reporters, columnists or bloggers.
But they ARE experts in direct marketing, communications and fundraising…which will help me show conservative candidates how to get more votes, more donations and more volunteers.
So the bottom line is that from this point forward, I may not be writing my e-newsletters on politics and public policy quite as often. And when I do, I might not cover quite as much.
To which I hear a number of you shouting, “Thank heaven!”
Instead, the bulk of my time will be devoted to writing Campaign Hot Tips at www.CampaignDoctor.com (subscribe today!) and finding other ways to show conservative candidates how to get more votes, more donations and more volunteers.
So rest assured, I’m not leaving the battlefield; I’m just taking the fight to a new front.
The 2012 Conservative Leadership Conference announced today that Mark Ciavola has been chosen as this year’s recipient of the event’s Nevada Conservative of the Year Award. He is the current chairman of the Nevada College Republicans, while also working on Congressman Joe Heck’s (R-Nevada) re-election campaign.
Mark’s involvement in Nevada politics began in late 2009 when he launched Right Pride, a conservative organization dedicated to spreading the message of limited government, free markets and individual responsibility within the gay community.
From there Mark briefly worked for the Republican National Committee’s Victory Program before being hired to run the volunteer efforts for Dr. Heck’s successful campaign against then-Rep. Dina Titus in 2010.
In 2011, Mark was elected president of the UNLV College Republicans. During his one year term, he grew the organization from 50 members to over 800, raised more than $31,000 and formed the Nevada Federation of College Republicans, which he presently chairs, by re-chartering the chapter at UNR.
Mark was appointed a UNLV student senator in the summer of 2011 and recruited a slate of candidates that took over the Student Senate in last October’s elections – winning 15 of 25 seats. Last month, Mark formed a ticket of conservative students to run for the student government executive board. His ticket won in a landslide, making Mark the new UNLV Student Body President.
“It’s one thing for a conservative to win an election to head up a College Republican organization,” said Chuck Muth, president of Citizen Outreach and co-host of the conference. “But it’s quite another for a conservative to become the head of the entire student body at a major urban university.
“Mark is a doer, not a talker,” Muth continued. “And he understands the necessity of taking the limited-government/liberty message to constituencies and groups outside the traditional conservative movement’s camp. As such the Conservative Leadership Conference is proud to recognize Mark by honoring him as this year’s recipient of our Nevada Conservative of the Year Award.”
The award will be presented to Mark at the annual Awards Luncheon on Saturday, June 9, 2012. For additional information, go to http://www.CLC2012.com