commentary:

We shouldn’t keep meeting like this

By Jon Ralston (contact), In Business reporter

Fri, May 22, 2009 (3 a.m.)

The conditioned reaction to the announcement this week of yet another interim attempt to pave the way for state lawmakers to broaden the tax structure is this: Here we go again.

For those of us who lived through the Price Waterhouse study in the last millennium and the Guy Hobbs-chaired analysis earlier this decade, we know how this story ends: Well-intentioned folks commit lots of time and hard work to coming to the conclusion that businesses should pay more — and then the entire enterprise is wasted amid 120 days of legislators trying to show they are smarter than the private citizens and special interests brandishing apocalyptic scenarios to destroy any plan.

This is the way tax studies disappear, not with an enactment but with an entombment in the place where all tax studies go to die: Carson City. Or, to be more accurate, where they go to be murdered by self-interested, often selfish players.

So why then would state Senate Majority Leader Steven Horsford even want to try? Maybe, just maybe he really wants it to work this time?

Horsford wants more than just another dust-gathering study. His idea is to form an interim panel — the Nevada Stabilization and Advancement Commission — and bolster it with a group of expert technicians. So far, that sounds very much like the Hobbs panel of 2002.

But Horsford wants to go further. He also wants to have a parallel private/stakeholder panel that represents the various sectors of the economy to act as a pseudo-kitchen Cabinet to the commission — in the same way that various elite business types have quietly rubber-stamped what lawmakers are putting together now as the shaky tax bridge to get to the next session. And, finally, Horsford wants to hire an independent consultant, selected through competitive bidding, to analyze all of the alternatives and design how various tax plans could be implemented.

It’s fairly bold but also fairly complicated and it will be interesting to see how all the gears mesh if he can get it enacted. The key facet of this commission, which distinguishes it from past efforts, is that Horsford hopes to have bill drafts ready to go when the gavel comes down in February 2011. And beyond that, he also wants to fund anticipated improvements to the tax collection system so the explanation/excuse of “it will take too long to implement” does not apply.

The commission also will have impact statements so businesses will see how they would be affected. By doing so, the commission can get buy-in — or so Horsford hopes — from the people who will be affected by any proposal for corporate profits tax or sales tax on services, to name a couple of potential new taxes.

This is much to move through the Legislature in the final two weeks and you can be sure some lawmakers and lobbyists will recoil at what Horsford cleverly is setting up as a fait accompli. This is not about deciding whether the state needs an expanded tax structure — playing on the past studies that reached that conclusion, Horsford takes that as a given.

There also will be questions about follow-through — and I am sure the young majority leader knows that. But if he can retain the majority — and even get a couple more senators to get to a veto-proof majority — it may be a new day in the capital come 2011 — especially if there are still 28 Democrats in the Assembly.

Yes, I feel like I am watching a rerun. But I will suspend my disbelief and hope for a different ending.

Discussion: 5 comments so far…

By Mastermcom

5/22/09 at 8:59 a.m.

Suggest removal

Until the morons in Carson City realize that the TAX PROBLEM is a two sided coin, the only hope for Nevada and her citizens is to be consigned to living in a third world polity and get poorer every year.

You need to know how much you are going to collect (within reason) from all sources. Then when you have that number, you determine how to spend it on who, what, when and where.

It's a real simple problem to solve:

You institute a 3% GROSS REVENUE tax on ALL Corporations doing business in Nevada ... you exempt the first $60K. To make it fair, you lower the gaming tax to 3% ... Gaming would still pay the 3% on top of the gaming tax.

No write-offs, no deductions of any kind. If Corporations don't like it, they can move to California.

Now you have a reasonably fixed revenue source. It msy flutuate some, but considering there is NO Personal income tax - people will still have an incentive to reside here, provided there are jobs, at least average healthcare facilities, and such.

It should not be the any Governments job to insure than any corporation or business makes a profit or operates at a loss. That's a management function.

Once you have secured the revenue source, then you can determine what you have to spend.

But politicians being politicians, we need to put a spending cap limit in place. Somthing like spending can't increase more than 2% per bienimum over the preceeding budget.

A 3% Gross revenue tax on corporations doin business in Nevada should bring in a surplus, at least in the first two years. Any surplus should be invested half in a rainy day fund and half in development thru block grants to each county on a
reasonably equitable basis.

Since there are 17 counties ... we divide the gross block grant into 20 units. Clark And Washo get 2 units, the other 15 counties each get one unit. The remaining unit is for oversight and monitoring how the money is spend ... It should only be allowed to be spent on hard assets such as roads or buildings or parks or capital equipment.

If there is a problem raise the 3% to 4% and have it sunset at the end of the next budget session and revert to the 3%.

Sales tax should be no more than 5% ... 3% to the counties ... 1% to education and 1% specifically set aside to fun healthcare on a state wide basis.

Property taxes should be limited to 1% of the purchase price of the property maximum or $120 whichever is greater.

Vehicle registration should be a flat $90 for all non-commercial vehicles and $120 for all commercial vehicles.

Use taxes can stay where they are and folded into the gross state revenue from which the elected officials can divy it up as they see fit within the budget limitations.

It's really not rocket science.
By Patrick_R_Gibbons

5/22/09 at 11:58 a.m.

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Jon, please explain this statement "self-interested, often selfish players" when referencing the attempts to destroy tax hike plans. Are you assuming that policymakers who want more taxes are somehow selfless? Do you believe that somehow donning the title of public servant makes someone altruistic to the point where they serve the needs of all others before themselves? Is there something special in the tap water of government buildings I should be aware of?
By JBond

5/22/09 at 2:26 p.m.

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Patrick:

I hardly think you need anyone to explain the terms self interested and often selfish players. You and your dubious orgainization are prime definitions of that statement.
By Patrick_R_Gibbons

5/23/09 at 9:40 a.m.

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So public employees, state legislators are somehow unselfish? Does gaining employment with the government somehow remove all human self interest from your body?

You'll have to do more than make a sophomoric and fallacious statement like that Jbond.
By JBond

5/24/09 at 11:11 a.m.

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Really Patrick, comments like these show how sophomoric you really are. Perhaps you need to take course in reading comprehension as your intepretations of my comment really show that english must not be your first language. Looking at your posting history really proves my point. BTW I work for a bank.