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Wednesday, Nov. 18, 2009 | 3:48 p.m.
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Sun Coverage
CARSON CITY – Nevada’s tax system hits hardest at low and middle-income wage earners and gives the rich a break, according to a new tax study.
Nevada’s tax system is the nation’s eighth most regressive, the Institute on Taxation and Economic Policy said in the study released today.
Matthew Gardner, author of the study, said the “lack of a progressive income tax to offset regressive sales and excise taxes, as well as property taxes, is the most important factor in making the Nevada tax system so regressive.”
Gardner, executive director of the Washington D.C.-based institute, said “taxes ought to be based on people’s ability to pay them, which means that the share of income paid in tax should rise as income grows, not fall sharply as is in the case in Nevada.”
Sen. Bob Coffin, D-Las Vegas and chairman of the Senate Taxation Committee, said this is the same conclusion that every prior tax study in Nevada has reached. “They are not breaking any new ground.”
Gardner suggested that a personal income tax could be enacted and could result in a reduction in the sales and use tax. But Launce Rake of the Progressive Leadership Alliance said Nevada has to deliver its services and it would be premature to talk about a tax swap.
Nevadans spoke loudly in 1988 and 1990 against a personal income tax. They voted into the state Constitution a ban on a personal income tax.
The vote in 1988 was 276,976 for the income tax prohibition and 59,803 against. In 1990, voters approved the constitutional amendment 226,079 to 86,335. A constitutional amendment has to be passed twice by the voters to gain final passage.
The 2009 Legislature is starting a study to look at broad-based taxes that are fair and equitable and that will be considered by the 2011 session.
Because of the state’s poor financial condition, the last Legislature raised the sales and use tax by 0.35 percent, raising the rate to a minimum 6.85 percent for this biennium, according to the Legislative Counsel Bureau.
The Legislature also increased the hotel room tax in Clark and Washoe counties and the business license fee was raised statewide $100 to $200.
It lowered the depreciation rate for motor vehicles thereby increasing the tax paid for registering cars and trucks and it boosted the tax on short-term car rentals from 6 to 10 percent.
Bob Fulkerson, executive director of the Progressive Leadership Alliance of Nevada, says the study by the institute shows Nevada’s tax structure “soaks the worker and coddles the wealthy.” He said the multi-millionaires or multi-national corporations, such as big-box discounters and gold mining companies pay less in taxes and ship their profits out of state.”
The progressive leadership alliance has strongly pushed for improving services to the poor and lower income citizens in Nevada.
The study says that those who make less than $21,000 a year pay 8.9 percent of their income in state and local taxes in such levies as sales, gas, cigarettes, alcohol and property taxes. Compared to those who earn $574,000 or more, the tax burden is 1.6 percent of their income.
Middle income earners in the $34,000 to $53,000 category shell out 6.4 percent of their income in taxes.
Nationally, Gardner said poorer families pay 10.9 percent of their income in state and local taxes compared to 5.2 percent for the rich. And Middle income earners shell out 9.4 percent of their income in the state and local taxes.
Gardner said Nevada has generally lower taxes than other states. He suggested the Legislature “not dig the hole any deeper” by imposing the taxes that hit hardest at the low and middle income person. And then consider a personal income tax.
The study says the state of Washington has the most regressive tax structure with the poor paying 17.3 percent of their income in state and local taxes. And the top earners pay only 2.9 percent of their income in taxes.
Other regressive states, according to the institute, are Florida, South Dakota, Tennessee, Texas, Illinois, Arizona and then Nevada.
The study says the least regressive states have progressive income taxes and rely less on sales and excise taxes. “Vermont’s tax system is among the least regressive in the nation because it has a highly progressive income tax and low sales and excise taxes,” according to the study.
Others in this category are Delaware, New York and Delaware and the District of Columbia.
The poorest use the most services. Make them pay. Or maybe some forced labor for the services they consume.
Nevada is one of the lowest taxed states in the country, i lived here 12 years i am yet to pay a state tax and my property tax on my 4 bedroom house I bought in 2002 is less than $1500 a year. You wanna see high taxes? Go visit upstate NY where a house compatable to mine is $4,000 to $5,000 a year and then you have to pay a very high state income tax. Taxes are so high in NY state because they lose revenue when industry leaves the state because of high taxes.
BTW, i have been unemployed for over a year now (had surgery) and i would hate to see Nevada become a high taxed state like a NY, we can do better than that.
Here we go again. Let's raise taxes on everyone working and give money to those that don't. Does a dealer really want to share their tips with the guy passing out girlie ads on the street? That's what the democratic party wants to achieve.
I'm starting to think everyone is absolutely crazy! STOP the government from spending money it does not have. PERIOD.
Nevada has a big shortfall this year....guess what...you're spending TOO MUCH. Cutback Expenses!
The only way you can get around that obvious and true solution is to ignore it and talk about something else.
Fix the problem (spending) not the symptom (need for more tax revenue).
If the average American is not stupid, as I believe, it would sure be nice to see some proof of that as it relates to taxes and out of control goverment spending.
Hooray for Nevada? We hit our middle class and working poor the hardest? When will the political elite learn? It ultimately doesn't pay to enact these "reverse Robin Hood" policies of stealing from the working poor to insulate the super-rich.
Bitwise-
"you're spending TOO MUCH"
How? How can we when this state has the lowest state employee per capita count around? How can we when this state has the cheapest government of all 50 states? How can we when we invest so little already in our schools, parks, roads, and all other services that we all use?
If you want services, you have to pay for them. Simple as that. Don't come to me complaining about the huge line at the DMV, the failed and overcrowded schools, the pothole plagued roads, and lack of police protection unless you're willing to invest in a better Nevada.
ghostcommander wrote:
> For those that do no want to pay any taxes, go to Somali, where they
> have no government since 1991.
The long arm of the US federal government taxes your worldwide income, even if you live in Somali. :-)
"Because of the State's Poor Financial Condition"
--- Compared to who?? California, Massachusetts?? NEWS FLASH -- Several states are hurting and many states Progressive minded in nature are hurting FAR worse then Nevada.
If somebody does not like the structure in Nevada... move to BK California. Look how well it's doing there. Want higher property taxes?? Move to Chicago where the home values are going down and the property taxes are going up. (Genius.)
"The study says that those who make less than $21,000 a year pay 8.9 percent of their income in state and local taxes in such levies as sales, gas, cigarettes, alcohol and property taxes. Compared to those who earn $574,000 or more, the tax burden is 1.6 percent of their income."
And Nationally, the average is 10.9% for low income workers so is Nevada being too generous?
(Notice the Redistribute the Wealth tone in this article? You would think that Nevada is punishing the poor.)
So.. tax the top income earners and give their money to the state and let them decide on how to spend it? BRILLIANT!! Works fantastic in California!
Cy... Quoting left wing Redistribute the Wealth policy minded groups is fine... as long as you also quote people who see this study for what it really is....
An attempt of promoting the Redistribution of Wealth by taxing the rich, giving it to Big Government and letting them decide what is best on how to blow it to please Politicians special interest groups that contribute the most to their re-election campaigns.
"Bob Fulkerson, executive director of the Progressive Leadership Alliance of Nevada, says the study by the institute shows Nevada's tax structure "soaks the worker and coddles the wealthy." He said the multi-millionaires or multi-national corporations, such as big-box discounters and gold mining companies pay less in taxes and ship their profits out of state."
But Bob's solution to this is taxing every Multi Millionaire and/or Corporation when his "Progressive" group should be concentrating / educating more Nevadans on what companies are shipping "Profits" out of state and letting Nevadans decide if they want to do business with them.
Taxes are too high already and we are only paying a fraction of what NY or CA pays. The thing is I moved here 8 years ago to get away from high taxes and now they want to raise my taxes. That is one way to lower the population of the state.
Nevada has above average sales and gas taxes, I'm not sure about alcohol and cigarettes. Our sales tax is 6.85% and the gas tax is 33 cents a gallon. http://www.taxfoundation.org/taxdata/sho...
Get rid of those or reduce these types of sales taxes. That will help reduce the regressive nature of the tax code. To balance the budget, have a smarter less wasteful government (half the stuff the Silver State pays for is either not needed, or can be run more efficiently).
Furthermore, the poor don't care about taxes being progressive if you take more out of their paycheck. Yet, that is what PLAN advocates.
8.9% of $21,000 is $1869
6.4% of $53,000 is $3392
Is it me, or is $3,392 more than $1,869?
"taxes ought to be based on people's ability to pay them, which means that the share of income paid in tax should rise as income grows, not fall sharply as is in the case in Nevada" is just a weasel way of saying, the wealthy should pay more just because.
Taxes out to be based on peoples ability to pay them, does not automatically lead you to a conclusion that the rich/moderate income should pay a higher proportion of their income in taxes. It does not follow. These people just want more tax dollars, just because.