Columnist Jon Ralston: Can’t kill the taxation beast

Friday, April 25, 2003 | 5:22 a.m.

Gov. Kenny Guinn: "We need a billion dollars and a gross receipts tax. If you don't like it, you're irrelevant."

The state Senate: "Take your gross receipts tax, you mean governor, and shove it. We are relevant; really, we are."

The Assembly: "We don't like you much, either, governor, but we hate the sales tax on services and the state Senate even more. See, we are relevant, too."

Gaming: "We love gross receipts, we hate everything else, especially a big boost on our gross tax."

Business: "We have a plan that's not a bill that is a concept that is very vague that raises a lot of money that has no logic that really doesn't screw small businesses and consumers. You believe us, right?"

So now what?

Gross receipts is dead, killed 10 days ago by the Senate Taxation Committee. A sales tax on services is dead, entombed last week by the Assembly Taxation Committee. Or are they really gone?

As one noted philosopher, Don Henley, once put it, "They can stab it with their steely knives, but they just can't kill the beast."

He was speaking of happenings inside the Hotel California -- as opposed to East California, I suppose. But the taxation monster lives on in the Hotel Nevada because most of the teeth-chattering Gang of 63 know the need has been proven -- at least $700 million without any additions and much more if so-called enhancements are added. Oh, yes, and the tax beast is only lying dormant because those interim deadlines are a sham and nothing is dead until midnight on June 2.

Up until now, lawmakers have displayed formidable skill in showing us what they don't like. But pretty soon they will have to show us what they like. Then, these experts in finding the path of least resistance will have to travel a more difficult road.

They only have three choices:

1. Even though a revamped gross receipts tax by any other name will still smell as foul to some, either that or a corporate income/net profits tax is the only way to enact a broad-based, stable levy.

2. They can pass a sales tax on services that is logical and contains few exemptions.

3. Some sort of hybrid or amalgam could be created. But the danger there is that the Band-Aids of the past will become the Band-Aids of the present. And the promise the Legislature made in last session's Assembly Concurrent Resolution 1 -- to find a broad-based tax solution especially to fund education -- will have been broken.

And speaking of promises yet to be consummated, the performance by the chamber types last week on their sales tax on services -- which is really a sorry tax on suckers -- represented their serial dissembling behavior.

They could hardly provide specifics of their Swiss Cheese services tax -- two years after they pledged to propose a plan and pay a gigantic share. They were exposed as representing their big members, who could avoid or absorb the tax, at the expense of their less fortunate members.

Yes, the Assembly Taxation Committee engaged in a choreographed exercise last week to deep-six the chamber plan. Yes, the members were encouraged by gaming and mining and labor to do so. And, yes, this was more about sending a message to the Senate than anything else.

But let's not forget the facts: A sales tax on services is not a business tax. It is a tax collected by businesses and passed on to customers. Period.

Even if you hate the gross receipts tax, even if you think it is really a gaming relief tax, it is much more difficult to stick on consumers. And gaming could easily pay a lot less under a sales tax on services than it would under a gross receipts tax.

Amid the usual capital mewling about the casino lobbying corps being heavy-handed and sniping from the Strip about what's happening 500 miles away, the real issue here should be weaning the state treasury off the gaming teat and recognizing that at least the casinos pay something and will pay more under any new plan.

The way that businesses for years have avoided any significant taxation is by dividing and conquering the gamers, who eventually surrender. The chamber folks are trying to do so again, quietly promising big gamers they can get off easy under their plan. And if the gamers dissolve into dissension, as they always do, they can point their fingers at a mirror next session when the Gang of 63 comes after them.

On Thursday the Economic Forum will present those final projections, thus creating the contours for the tax debate in the final month. We can hope that the colloquy will be elevated from the childish and churlish palaver we have heard so far from a politically concerned and policy-avoiding Gang of 63. But if not, perhaps the proprietor of the Hotel Nevada can invoke Henley himself and tell lawmakers to cancel their summer vacation plans.

If all lawmakers care about is running for the door just so they can find their passage back to the place they were before, Guinn should simply tell them they can check out any time they want, but they can never leave.