Columnist Jon Ralston: Nevadans for Real Tax Dodging

Friday, April 11, 2003 | 5:49 a.m.

"I swear that I support a broad-based business tax," said the first.

"I swear that I support a broad-based business tax," intoned the second.

"I swear that I support a broad-based business tax," promised the third.

Or words to that effect. And so it has gone here in the state capital. With solemnity, earnestness and straight faces, they continue to say it.

And as they say it in news conferences and before legislative committees, they sound very much like another group of business executives who once swore to another group of legislators that nicotine is not addictive.

Unlike the tobacco lords who lied before Congress, the business folks taking prevarication to a new nadir here sometimes actually appear to be more delusional than dishonest. They can't possibly believe what they are saying.

I have covered every legislative session since 1987. I have seen outrageously arrogant, oligarchic behavior from the gaming industry trying to influence lawmakers. Gaming can be heavy-handed and dictatorial as it wields immense clout over this process.

But at least the casino corps represent an industry that significantly contributes to the state treasury, has been the proverbial backbone of Nevada and allows residents to avoid paying a personal income tax.

The serial tax-avoidance disguised as community commitment by these chamber types is much more offensive than anything gaming has ever done. As the culmination of years of maintaining their free ride status through an artful bait-and-switch technique, Big Business is now pushing a faux business tax (a sales tax on services) that really is a direct tax on people, is running deceptive TV ads to promote their cause and is willing to cannibalize small-business folks to maintain their virtual immunity from state taxation.

Here is how stupid the chamber set thinks the public, its members (most of whom would be exempt or pay little under the gross receipts tax) and legislators are:

They have proposed a sales tax on services but not on services provided by influential members and have tried to mask that by advocating for a reduced sales tax rate. And yet they actually swear that the tax will raise $700 million plus over the next two years, will save the average family money and is broad-based, even though it carefully protects the corporations who are based out of state and have used Nevada as a place to make billions and subsidize their operations elsewhere -- you know, the places they actually pay taxes.

Even though the tax task force didn't recommend it, even though all polling shows the public hates it, a sales tax on services could legitimately be defended as broadening the base. But not this proposal.

This one is the brainchild of the brazenly named Nevadans for Real Tax Fairness, a front for the chamber and its friends that should be renamed Nevadans for Real Tax Dodging. There is no logic that anyone can discern to the list of what should be taxed and what shouldn't -- other than that some of the exemptions can be traced to chamber insiders whose businesses might as well have been listed as exempt. To wit:

You would pay the tax if you need an attorney or have someone maintain your lawn or get your car washed. But if you are in the communications business or in the gas and oil business, or in many types of construction business or "water supply and sewerage systems," you are exempt.

So other than the sales tax being regressive, other than it featuring the inherent instability lawmakers are trying to fix, other than it being a direct hit on consumers and one businesses never pay, it is a fine, thoughtful idea.

Say what you will about gross receipts or a corporate income tax. But at least they make it more difficult for businesses to pass on the cost.

Amazingly enough, these hypocrites opposed a sales tax on services when it was proposed during the 1991 session, saying it is "not fair share or broad-based," according to a position statement it put on the record. The arguments remain the same today; it's just the tax-avoidance strategy has changed.

If they were at least honest enough to declare, "We don't want to pay any more, we have gotten away with not paying for years and we will delay paying as long as we can," I'd have more respect for them. But they are fundamentally dishonest, especially in those ads that tell you to call your legislator if you want the sales tax reduced (without telling you it will now apply to many things it never did before) and another that features a street hot dog vendor, who the ad implies will pay the gross receipts but who actually would have to sell an entire Oscar Mayer factory's worth to be eligible.

So for them to claim they care about education, they care about the safety net, they care about the state's future is rhetorical castor oil. If these chamber types get away with this -- again -- they will have been rewarded just as tobacco companies were for years by dissimulation and deflection. Legislators who hear a chamber lobbyist swear he or she supports a broad-based business tax should have a ready response: They should swear right back.