Columnist Erin Neff: Big business continues to hit little guy

Erin Neff

Monday, July 21, 2003 | 8:11 a.m.

WEEKEND EDITION

July 20, 2003

Erin Neff covers politics for the Sun. She can be reached at (702) 259-4062, or by e-mail at erin@lasvegassun.com.

ANTI-TAX activists like to talk about the sticker shock Nevada residents will experience if hundreds of millions of dollars in new taxes are approved.

Surprisingly there's no one talking about the real sticker shock in this state, rising prices that have nothing to do with taxes, but with a big corporation bullying the little guy to make up for its ineptitude.

Surely you've studied your Nevada Power bill this month to see how much you'll be forking over for the privilege of having a cool residence amid 110-degree heat.

Yet, nobody seems to note that "deferred energy charge" on the bill -- the charge made possible thanks to the company's imprudent decisions during the energy crisis.

Nevada Power's rate hike in Southern Nevada -- just under $500 million -- is greater than any amount that was proposed in any broad-based business that would be raised over the next two years.

The dreaded gross receipts tax on business -- whose last incarnation was one tenth of 1 percent -- would raise $300 million over two years.

The utility giant is a poster child for why big business should be taxed.

Nevada Power shares the attitude of banks and retail giants that the only increases should be on the little guy, not on the broad shoulders which can carry the burden with relative ease.

Speaker after speaker at Thursday's anti-tax rally at the Sawyer State Office Building bemoaned the "mini-IRS" that would be required to implement a gross receipts tax.

That doesn't seem to be on the minds of the folks in Utah, California and Florida -- just a few of the states that this week which learned they were losing up to one-half of their potential tax revenue thanks to the creative shelters corporations had found.

The report by the Multistate Tax Commission found that states lost between $8.3 billion and $12.4 billion in 2001 thanks to companies hiding profits.

We can't have a problem like that. We don't have a taxation department (mini-IRS or not) that collects any major business taxes.

Unlike 47 other states with some kind of net profit tax, we don't need to worry about companies hiding their profits in some offshore account.

In state after state studied by economists, the resulting trend was that companies that can hide money, do -- state needs be damned.

This state seems to be happy plodding along to even greater fiscal trouble by again Band-Aiding an arterial gash in the budget.

The Southern Nevada Water Authority seems to recognize that Nevada is the fastest-growing state -- a state that will continue to see welfare spending explode as those moving here to escape California's taxes need services.

Just last week the water authority announced it's going to increase water rates 40 percent to entice homeowners to conserve.

You can turn off the tap or sprinklers, but there's not a way consumers could get around a sales tax or property tax hike.

That's why business taxes and reform make sense in Nevada.

Neavada hasn't created any tax since 1991, hasn't raised the levies on cigarettes or liquor for decades and can't even keep up with inflation.

Anyone who suggests this is the right way to run a state is still living in the 1980s when the state last raised any of the existing taxes.

Meanwhile scare tactics flood the radio -- with one advertisement proclaiming every Nevadan would pay $1,000 under the last proposal offered by Democrats.

At a real stretch, it just achieves voodoo economics.

Residents aren't the ones eyed to pay the taxes here. Those who run big corporations are.

Meanwhile big business, whether using Nevada Power's mentality or just plain greed, continues to laugh all the way to the bank.

The bank that pays nothing in Nevada.