Group proposes new taxes to fix state budget

Monday, Jan. 12, 2009 | 12:32 p.m.

A liberal group proposed a host of new and higher taxes in order to avoid steep budget cuts over this upcoming biennium.

The Progressive Leadership Alliance of Nevada presented the plan Monday to raise, according to their figures, $1.259 billion a year. Officials with the organization said Nevada's tax structure places an unfair burden on the poor and middle class, and lets profitable businesses largely off the hook.

The plan would:

Eliminate most tax exemptions deducted by mining companies before they pay the net proceeds of minerals -- $141 million a year.
Institute a "business profits tax" of 5 percent on businesses with profits between $50,000 and $100,000. Businesses with profits over $100,000 a year would pay 7 percent -- $194 million a year.
Double the modified business tax, which is a tax businesses pay based on payroll -- $279 million a year.
Tax meals that the gaming industry comps to players. PLAN says this would generate $140 million a year. The Department of Taxation, though, has said that paying back taxes from 2002 owed to gaming companies under a recent Supreme Court ruling would cost the state a total of $60 million and local governments $40 million.
Increase the room tax by 3 percentage points in Clark and Washoe counties. PLAN says that would generate $125 million a year, but that was before the serious downturn in the tourism market. More recent estimates have put that number at $100 million a year.
Institute an "unearned income tax" of 3 percent on income over $200,000 per year. That includes money from capital gains, interest and dividends. That would bring in $380 million a year. It would also require a constitutional amendment, which would require approval from the voters twice, in 2010 and 2012 before it could be enacted in 2013.
Income tax. It would also require constitutional amendment, though PLAN does not lay out specific rates.

PLAN said Nevada's tax structure, which relies heavily on sales tax and gaming tax, has the poorest of the state paying a disproportionately higher percent of their incomes in taxes.

According to PLAN, the poorest 20 percent pays 8.3 percent; the middle 60 percent pays 6.5 percent; the wealthiest pays 2 percent.

Asked on a conference call whether, during the state's recession, these tax increases would force companies to make layoffs, PLAN representatives said the tax increases are focused on businesses that are profitable.

Asked if the tax increases should be accompanies by concessions from public employees or with cuts to government, Jan Gilbert, the organization's lobbyist, said, "I cannot fathom cuts without hurting children, families, seniors, the disabled... I don't think we have anywhere left to cut."

The conservative Nevada Policy Research Institute last week released their own plan. While it mostly lacked hard numbers, one proposal was to eliminate the Department of Business and Industry, which regulates most businesses in Nevada. It said such a move would have saved the state $385 million this past biennium.

Discussion: 14 comments so far…

By KDR81

1/12/09 at 1:06 p.m.

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$295 million in savings by not reducing class room sizes (no benefit there anyway what matters most to a child is the quality of the teacher)

$320 million in savings by expanding charter school options.

up to $800 million in savings from a tuition scholarship or tuition tax credit program.

$5.5 billion saved by Florida through competitive bidding on government services...

http://npri.org/publications/npris-recom...

Other than that it is difficult to get "hard numbers" because no one knows how wasteful our government actually is. For example structural reform of PERS and health care benefits could save the state $500 million a year, but we don't know how wasteful we really are, could be more could be less.
By Future2012

1/12/09 at 2:06 p.m.

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"Asked on a conference call whether, during the state's recession, these tax increases would force companies to make layoffs, PLAN representatives said the tax increases are focused on businesses that are profitable."

That is ducking the Question.

We can answer for PLAN.

If there is a 5% profit margin then we are looking a a million dollar a year business.

With the risk in acheiving sales number today taking another $5,000.00 is a big deal. So retaining or hire does become an issue during a recession.

PLAN has no clue if these numbers are acheiveable when consumers can stop buying unnecessary goods and services. Just look at the spa industry

Yes it will cost jobs and prevent hiring.
By dbuss

1/12/09 at 2:27 p.m.

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Thank you to NPRI and the work they have been doing to present information about the status of our state's revenue. We can and should have the public policy discussion that's taking place on budget plans and possible tax actions, but those conversations should be based on the truth that state revenue is not going down. It's staying level. Our "budget problem" is actually plans and expectations to spend more when the revenue level is flat.

We've been trying to stress this, as well as highlight the importance of policy deciders clearly spelling out what we're going to get in return for the possible tax and spending increases that are being proposed. www.nvfbblog.org
By jfnance32

1/12/09 at 2:43 p.m.

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I think they are asking to remove nearly a billion dollars out of the private sector in Nevada.

Hmmmmm....I wonder if that will have any negative affect on the economy and jobs.

I wonder.........................
By KDR81

1/12/09 at 3:06 p.m.

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Nevada could probably eliminate the sales tax, MBT, tax on insurance premiums, and property taxes if it ran more state services more efficiently.

In fact, that is only $1.7 billion of revenue out of $7 to $8 billion spent each year!
By MysterMr

1/12/09 at 4:48 p.m.

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Is this the "How to kill all remaining business - and tourism at the same time in Nevada" plan?

Hey - let's give all that money over to the school district - they spend it so frugally - and get so much value for every dollar they get. :-p

Of course, groups like this as we know are only shills for public employee unions. It's unreal though. These "plans" never generate what they are supposed to because businsses just go under - or move elsewhere. Tourists go to cheaper destinations - then the same group comes up with a "new plan" to screw us even more while the public employees live high on the hog.

Unreal - and gross.

Economy is up - raise taxes
Economy in a slump - raise taxes
By huh

1/12/09 at 7:52 p.m.

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I moved myself and my business to Nevada specifically because there were no corporate or individual income taxes here. (A "business profits" tax is still a corporate income tax.) I'm sure I'm not alone. I'm quite certain that adding an income tax will only hurt the poor as companies and individuals move out out of state, along with the money they spend here and the people they employ here.
By morgen

1/12/09 at 9:46 p.m.

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<<Nevada could probably eliminate the sales tax, MBT, tax on insurance premiums, and property taxes if it ran more state services more efficiently.>>

what civilized place in this entire world does that, KDR? What do you have inside your skull, air??
By morgen

1/12/09 at 10:37 p.m.

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<<I'm quite certain that adding an income tax will only hurt the poor as companies and individuals move out out of state,>>
where are they going to move to? to another state that has income tax? Compare quality of public services in states with income tax to those without and get back to me, OK? This ain't rocket science.
By RedwoodTree

1/13/09 at 12:20 a.m.

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Ridiculous proposal, unless they want thousands of small businesses, like ours, moving back out of state due to the tax structure, which is why we moved here, creating jobs in the process.

Wait, let's tax those who run their businesses properly...to fix this. ROFLOL

Fully THREE of those proposals affect our ONE business...sound fair?

Hopefully this nonsense will not come to pass, or off we go out of NV, with our jobs in tow.
By huh

1/13/09 at 6 a.m.

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Morgen,

<<I'm quite certain that adding an income tax will only hurt the poor as companies and individuals move out out of state,>>
> where are they going to move to? to another state that has income tax?

No, to another state that has *no* income tax, silly. Like Florida, Wyoming, etc. That's what I'd do with my business. Nothing wrong with living in Wyoming, etc. Yes, I know Wyoming has fewer services. For me and no doubt others too, it's not all about the services that a state provides. Nevada isn't the only nice, income-tax-free state to live.
By pmmart

1/13/09 at 7 a.m.

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Are they suggesting that Nevada adds these ideas/taxes on top of the existing taxes?

Sounds like living here would get very expensive for those who are making and spending their money in the state already.. and make L V an un-attractive place for retirees .. Texas doesn't have a state income tax and manages to thrive .. maybe Nevada should send a fact finding group there to study their budgeting system.
By morgen

1/13/09 at 10:06 a.m.

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In Texas, more than 30% of adults under age 65 did not have health insurance in 2004 to 2005.
Forbes Magazine

"The home of President George Bush ranked in the top 10 Most Dangerous States as recently as 2004"
AOL Business

"Graduation rates for the 2002-03 school year show that only about two-thirds of all public school students in Texas complete high
school with a standard diploma. Texas falls below the national graduation rate of 69.6 percent and ranks 35th among the states. "
Editorial Projects in Education

Do you call that "thriving," Pmmart? Only Nevada is worse... this includes being the single most dangerous state!
By kurtz

1/13/09 at 7:23 p.m.

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why not add a disclainer to this article and others like it telling the reader who the progressive leadership alliance of nevada is and who they represent? i'm reading an opinion by a group i know nothing about. the name progressive leadership group of nevada tell me nothing. they could be an outlaw motorcycle group for all anyone knows.

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