Letter: Increases in business taxes lead to inflation

Wednesday, May 12, 2004 | 8:49 a.m.

Steve Kanigher's Sunday article, on how the huge tax increases in Nevada have not hurt tourism or the economy, is quite interesting to say the least. According to him, all of the increases haven't stopped growth in businesses and tourism. He is right, of course, that during this time there has been little effect in these areas.

There is one small factor, however, that I did not find in the article. The factor is that businesses are passing these tax increases on to the consumers wherever possible, and that, in time, the increased taxes will have a detrimental effect on business in general. The increases will result in higher inflation and higher interest costs, all of which are paid by the consumers.

We saw a robust economy during the 1990s come to an end. We saw U.S. businesses sending manufacturing jobs, high-tech jobs and entertainment jobs overseas in order to remain competitive. Could this all have been a result of the largest tax increase in the history of the U.S. in 1993?

Yes, it is quite possible that the boom that resulted from lower federal and state taxes in the 1980s and early 1990s came to an end because tax increases often take years to reflect the damage that they do.

BOB DUBIN