Columnist Jon Ralston: Businesses insist on free ride

Friday, July 19, 2002 | 3:49 a.m.

I REMEMBER shaking my head as the chamber types talked about how committed they were, in the words of lobbyist Sam McMullen, to paying "the giant share (of new state revenue) and that a broad-based business tax undoubtedly will be a component of any future funding needs."

The date was May 22, 2001, and the Legislature was wheezing to a close and McMullen and a bunch of other business lobbyists were applying the coup de grace to a new tax plan by state Sen. Mark James but promising to come up with a package of their own by mid-2002. This from the same free riders who for years have had the chutzpah to whine about a $100 annual head tax on employees but have never cared a whit that many of their members pay a pittance into a state government that increasingly cannot fund education, social services and other programs at even mediocre levels.

So, no, I had no expectations as the promises were made. And last week McMullen and his friends fulfilled those expectations. They presented their plan to that gubernatorial tax committee and showed that they still are as brazen as ever, pretending to be at the tax table while underneath they have their fingers crossed and ready to point them at gaming.

The problem isn't new but this story is getting old. The business folks know gaming is vulnerable to a public that thinks the casinos can always pay more. So whenever anyone -- usually someone from Las Vegas Boulevard South -- talks about a broad-based business tax, the chamberites fret about hemorrhaging members from their organizations, make a lot of commotion and then propose to do and contribute what they do best: nothing.

Here's the plan they had the gall to present last week: doubling that asinine head tax, which now brings in about $80 million a year. Raising a few corporate filing fees -- again, not much there. And then, I suppose, the broadening of the tax base McMullen promised: a sales tax on services.

Now there are a ton of questions about a sales tax on services to begin with, none of which they can answer. To wit:

Which services? How much? What's the rate?

Yes, it is also regressive and not, as they promised more than a year ago, progressive. But that is emblematic of these groups. They are always looking to see how far they can push the state backward.

But the problem with a sales tax on services is that the strategy is transparent: The business folks will do anything to continue doing nothing, to avoid doing what they should if they had any sense of responsibility -- force banks, out-of-state retailers, major homebuilders and others to contribute to the state budget in the way the gaming and mining industries do. Many are profitable, so fork some of that for the privilege of doing business in an economy that is created by gaming and that banks and retailers and homebuilders have grown rich exploiting.

Fine. More power to them. Capitalism in action.

But pay your fair share through a gross receipts or net profits tax. Instead, this sham turns businesses not into taxpayers but tax collectors. If an attorney or a barber or a manicurist has to charge a sales tax for a service, that's a direct charge to a customer. Yes, the businesses later have to send the tax to the state, but that doesn't make sense and it's unlikely that it's broad enough.

How do you rope in banks and retailers and developers with a sales tax on services? You don't. Who controls the chamber? See the first sentence of this paragraph.

One more point on what sounds like such generosity from these poseurs: doubling the head tax. Figures prepared by the tax panel's technical committee show that 62 percent of the state's businesses have less than five employees. No wonder they are so magnanimous.

Do these people think everyone is stupid? Do they think the tax panel, the Legislature and Gov. Kenny Guinn can't see through this?

Las Vegas Chamber of Commerce President Kara Kelley, to her credit, has been making the rounds the last few months with the gamers to avoid an all-out war. And the chamber did not make its own presentation at last week's meeting, although McMullen has become synonymous with the group that is his signature client.

But the gamers are fools and cowards if they are bamboozled by this sleight of hand. And lawmakers and the governor are irresponsible and pathetic if they fall for it, too.

In a state where climbing to the national average in education spending is considered a lofty goal, in which the state's commitment to social services and health care programs is piecemeal and penurious and in which tax policy continues to be an oxymoron, this is what the business community calls progressive and responsible.

Until the casinos overcome their fear and don't back down when the business folks threaten an initiative, until the governor and the Gang of 63 decide to publicly point their fingers at the business free riders, this travesty will continue until everyone is shaking their heads and wondering why Nevada is such an embarrassing backwater.