Gibbons can’t even explain his stand against taxes

By Jon Ralston

Sunday, April 26, 2009 | 2 a.m.

My guess is you have forgotten about SAGE — and it’s not a word you have heard used too often during the first two-thirds of Session ’09.

It’s been awhile since the Spending and Government Efficiency panel has made any news — last we heard it was plagiarizing and then radicalizing the Las Vegas Chamber of Commerce’s public benefits reform plan. To give SAGE its due, the group has been engaging in a systematic and detailed exploration of the various areas of state government spending, with 11 task forces sequentially due to provide recommendations starting next month.

SAGE actually met Thursday — and no one much noticed. The agenda was full, but it is the first item that interests me today: “Address by Gov. Jim Gibbons.”

The Man Formerly Known as Governor created SAGE — one of the few potentially smart moves he has made — and he came not to take its temperature but to provide what he usually adds to substantive, sober endeavors: Ø.

Those who were there say he was “awful” and “embarrassing” in his 20-minute address, with his usual inchoate and incoherent remarks. But that is not news — you hardly need another recitation of how the man supposed to be leading the state has virtually no followers.

But from what I understand from sources who were there, after his exhortation to the group to “do the right thing” and to perform a Copperfield-like trick of improving services while cutting spending, Ø directly addressed (for the first time I have heard) the incipient tax plan being bandied about in private legislative meetings. That hardly visionary idea, which has been around since the session’s first day, is to double the Modified Business Tax (a payroll tax levied at a minuscule .62 percent) and impose a sunset-laden, small increase in the sales tax.

The Man Formerly Known as Governor told the SAGE members “that doubling the MBT and increasing sales will destroy business,” said one person in the room, an account I have verified. (And he repeated the comments in his latest faux podcast.)

Ø provided no evidence for this assertion — that a doubling of a tax that even the chamber folks have whispered is acceptable and a slight, time-limited boost in the sales tax would decimate the economy.

This assertion came less than 24 hours after a broad spectrum of business leaders met with legislative leaders and told them they understand a tax increase may be necessary and that the vehicle they were considering was not cuing any dirges. Indeed, the nearly two dozen business types — leaders in industries from gaming to construction to real estate to health care to mining — generally told lawmakers they believed the administration budget was unsupportable and that $600 million to $800 million in tax increases would be necessary.

Let’s be clear here, folks: This was no flock of liberals with their hearts bleeding; indeed, these generally are conservative business people whose only hemorrhaging is from their bottom lines.

What does Gibbons know that they don’t know? That’s easy: Ø.

These also generally are people who supported the Republican incumbent when he ran in 2006. You would think some of them might want to visit their man and tell him to either shut up or think before he speaks. I think it’s likely some have done one or the other and The Man Formerly Known as Governor’s deafness to anything but unvarnished sycophancy resulted in Thursday’s performance.

Then it got worse.

Steve Greathouse, a SAGE member and former chairman of the Nevada Resort Association, asked the man without the plan why major retailers such as Wal-Mart and Best Buy and banks such as Wells Fargo have the same pricing structures in other states where they actually pay taxes. His answer?

“He really couldn’t answer Steve’s question — couldn’t even dodge it well,” said one person in the room. Offered another: “He answered some gibberish about renewable energy and not going to the well again. A sixth grader could debate him and win.”

The premise behind Greathouse’s question is that major businesses here could, even in these tough times, afford a tiny corporate profits tax — indeed, there are so few corporate profits that they wouldn’t have to pay much until the economy turned around. Most other states have either a profits tax or a gross receipts levy of some kind.

But in Nevada, lawmakers seem content to double a tiny payroll tax and increase sales taxes and the man across the courtyard declares such a feeble effort would destroy business.

This would be comic if it weren’t so pathetic. It certainly isn’t sage.

Jon Ralston hosts the news discussion program “Face to Face With Jon Ralston” on Las Vegas ONE and publishes the daily e-mail newsletter “RalstonFlash.com.” His column for the Las Vegas Sun appears Sunday, Wednesday and Friday.