E-ticket to doom and gloom

By Jon Ralston (contact)

Fri, May 15, 2009 (midnight)

So, legislators, you have all but finished the budget and you have reached agreements on contentious issues such as higher ed and K-12:

Where do you go now?

They’re going to Taxland.

And so now they can clamber on board the panoply of rides that is available to them when they arrive, some with the ups and downs of a roller coaster, some with the frightening booby traps of a haunted house and others with the slow, steady pace of the circus train that greets you at the entrance.

Every Carson City field trip to Taxland is different, but also somehow eerily the same: They talk about policy and deliberativeness but act with politics and recklessness. No reason to wait, to take your time

when there is a Fast Pass to getting home and escaping from the injuries Taxland inevitably inflicts.

But this is no harmless playground; no one is indemnified here. Consider the options, none of them too amusing:

• The Payroll Tax carousel: Round and round and round they go, and they get nowhere in expanding the tax base. But it is not politically dangerous — even the chamber types seem willing — and as boring as it may be, you always know what you are getting for your ride: Not much.

• The Sales Tax roller coaster: It is the biggest attraction in Taxland because it has the highest highs and lowest lows — when times are good, it will bring in a fortune and when they are not, it will cost the state a fortune. It’s exciting, but not always fun and often will make you sick to your stomach if you stop to think about who pays the disproportionate amount of sales tax: It is one of the more regressive taxes imaginable. But, oh, the thrills of predicting whether it will go up or down and how fast ...

• The Mining Tax Pirates of the Cow Counties ride: The operators of this one warn you how dangerous it could be to the state’s existence to tinker with the controls here. Just because gold is soaring now, don’t expect it to soar forever. Just because their tax bill is low now, don’t expect it to be low forever. And if they lose some of those deductions, well, they can’t be responsible for the ride shutting down.

• The Sales Tax on Services Carnival: Step right up and try to shoot down all the possible ways to expand the sales tax base. Attorneys? Look out for the trial lawyer lobby. Retailers? Look out for the retailers’ lobby. Dry cleaners? Look out for the chamber — well, maybe not; those folks only lobby for big business.

• The Gross Receipts Haunted House: Oh, you can’t go in there. If you do, businesses will flee the state, economic diversification will shrivel and the economy will go from recession to depression. Even if you try to exempt three-quarters of the businesses in the state, just capturing the larger outfits, you will never get out alive. It’s certain political death. Do not go in there, whatever you do.

• The Corporate Profits Tax Scary Adventure: There no corporate profits these days, so what are you thinking, gang? And don’t even think of putting it in to be triggered two years from now — see apocalyptic scenarios from gross receipts. We cannot eviscerate the economic diversification efforts that have so diversified our tax base that we still remain dependent on sales and gaming. And businesses will flee. They will flee! Just as they did when that payroll tax was passed in 2003. They are gone. All of them.

By the time they are finished — pray for June 1 — we will have heard all the lamentations of fiscal doom and fingers pointed westward for an example of tax policy run amok. The one thing you know for sure about Taxland is what one observer once said about another kind of California adventure:

You can check out any time you like, but you can never leave.