Gibbons proposes new tax on debtors

Monday, May 3, 2004 | 9:46 a.m.

RENO -- Rep. Jim Gibbons said he is looking into a new plan to make up for tax revenue lost to the state with the phasing out of the estate tax.

Under the new plan, Gibbons wants to tax those who don't pay their debts. He said a person who is not paid a debt is able to write it off his or her income tax.

"But the person who has failed to pay that debt actually gets a beneficial income because he didn't pay the debt. Yet the person who didn't get the income is filing for tax relief."

Gibbons, who was scheduled to file for re-election today, said Saturday while attending the state Republican Party convention that the state has lost millions of money since the federal government moved to phase out the tax. Nevada gets a share of the federal tax, which it uses for public schools and the University and Community College System of Nevada.

The state has received $16 million from the estate tax for the first seven months of this fiscal year. That's a 26.2 percent drop from the previous year.

About $8 billion a year is written off in taxes, he said. Asked how debtor could pay the tax if he or she could not pay off the debt, Gibbons said, "You would have to take them to court."

Gibbons also said he would continue to support a tax-free Internet because it is a venue for free speech.

At present, a person can buy items on the Internet from another state and escape the sales tax, while Nevada merchants have to charge the tax on the same goods. The state is losing millions of dollars in tax revenue on these goods that are bought over the Internet.

Gibbons told reporters Saturday that Nevada businesses "make a valid point" in their complaints about being put at a competitive disadvantage. But he added, "I just don't support a broad Internet tax on all issues the Internet is engaged in, some of which have not commercial value but more a free speech value. If we can't distinguish between the two, we should be taxing any of it."

He also said he has gone forward with his plan to get additional money from the sale of public lands in Southern Nevada that is now going to the federal government. He said he wants to change the division to give 35 percent of the money received to Nevada education, up from the present 5 percent.

"They are looking at over $1 billion in sales over the next 10 years in Las Vegas. If my bill is passed, that's a $350 million income to the school fund for the state of Nevada," he said.

Asked about running for governor in two years, Gibbons said he was keeping his options open.

Gibbons' 2nd Congressional District represents a small part of Clark County and the rest of Nevada. There are 159,006 Republlicans, 117,794 Democrats and 48,207 non-partisans.