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July 31, 2014

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jon ralston:

Consideration, not condescension, needed in talk about business tax

The main problem with having a debate over Nevada’s tax structure and spending patterns is that it quickly devolves into pabulum.

No new taxes.

Make mining and gaming pay more.

The unions are the problem.

Money will solve all education problems.

Politicians will be politicians, and special interests will be special interests. But in my biennial hope that a real debate will occur over these seminal issues, especially as the Gang of 63 and a new governor confront a financial cataclysm, I never expected open-mindedness from the Nevada Policy Research Institute.

Funded by conservatives and with a patronizing attitude toward everyone not in the Smug Tank, NPRI often has eschewed policy and analysis for snarky sneering. But then, in June, came this often-thoughtful dissertation from NPRI’s Geoff Lawrence, which contained an array of provocative proposals, including, shockingly, a plan to expand the sales tax base (with a concomitant drop in the overall rate to make it revenue-neutral): http://tinyurl.com/2chx5af.

It seemed like a good jumping-off point, especially because private talks among business folks had begun that were bandying about a sales tax on services. But on the eve of what promises to be an excruciatingly difficult legislative session, with no sign of an elevated dialogue from Gov. No New Taxes II and a collectively mum Gang of 63, NPRI has reverted to form and become the Nevada Policy Rationalization Institute.

To explain, I relate a recent to and fro with one Victor Joecks, who is NPRI’s deputy communications director. Joecks is quite the jokester, as this story will show you, revealing that his group takes the upcoming debate with little seriousness.

Joecks sent me an e-mail last week expressing faux puzzlement with this line from my Wednesday column: “I believe the key to any revenue package — which probably would have to include a tax decrease (repealing the payroll tax?) with a tax increase (some form of new business levy that would not crush folks in this economy) — is providing political cover for those potential GOP votes.”

Joecks asked: “A new business tax without negative consequences? What type of tax are you referring to?”

My response revealed my distaste for his condescending tripe: “So all business taxes have ‘negative consequences’? And I thought you were a think tank, not a political sloganeering tank. Please don’t send me nonsense like this anymore.”

Next thing I know, Joecks posted a blog headlined, “Ralston calls for a magic tax increase.”

Clever, ain’t he?

And this: “Now why didn’t NPRI — or anyone else — think of that? It’s magic! Budget problems averted!”

Hey, isn’t there a Strip venue that needs a new headliner? This guy is hilarious. (Full post here: http://tinyurl.com/28muhmo.)

Forget for a moment that many independent analysts — and some business folks — agree with me that repealing the idiotic payroll tax, a product of the horrific tax package of 2003, and imposing some kind of business tax might be a reasonable solution.

What astonishes me — although, perhaps, it shouldn’t — about Joecks’ attitude is not his haughtiness or nastiness — I get that all the time (and sometimes am guilty of it myself). It’s the hypocrisy.

In case you have forgotten, NPRI proposed a brand new tax in Lawrence’s proposal. Expanding the sales tax base means new taxes that could cause businesses to raise their prices and could have — what was Joecks’ brilliant construction? — “negative consequences.”

In his June proposal, Lawrence recognizes what every other tax study has concluded, which is that broadening the sales tax base could reduce revenue volatility, minimize economic distortions, minimize compliance costs and ensure tax equity — four pillars of reform that he cites, as have others.

And yet when I suggest a new business tax, Joecks has a conniption? Maybe the right-hand doesn’t know what the far-right hand is doing over at NPRI.

I truly was hoping the think tank could be part of the solution, not part of an all-too familiar problem: Reducing what should be a thoughtful discussion, with room for good ideas on both sides, to ideological hackery. As I have said for years, this is not just about money — Democrats must accept long-overdue reforms — but it is, to a great extent, about money.

There is not a lot of latitude for debate about the tax structure itself — all of those tax studies and a newer one by the Reno Gazette-Journal and UNR arrive at the same conclusion. But the serious debate, which Gov.-elect Brian Sandoval and the Gang of 63 must engage in, is what level of funding for various areas should be imposed on any new structure.

That’s a colloquy many have been longing to hear. NPRI should decide whether it wants to participate or just throw rocks.

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  1. Amen.

  2. Mr. Ralston,

    With the up-most respect, you are the King of Snark in Nevada (so I think its actually a compliment when you remark on someone's snarkyness).

    While Victor missed your point about repealing the payroll tax and replacing it means you were suggesting a revenue neutral tax, just like Geoff's proposal, Victor is right that all businesses taxes have a negative consequence (then again, all taxes do, we just have to weigh the trade offs).

    A corporate tax is a tax paid by everyone - they raise taxes, lower wages, reduce employment (the payroll tax falls more directly on wages and employment though) and finally dividends before they will ever dip into profits. Business taxes are also more volatile than several other forms of taxes (just as Geoff's analysis has said) - we are trying to avoid tax volatility (at least that is what the Democrats have said for years when trying to get a tax increase).

    Victor,

    Don't send Mr. Ralston emails, you only get in trouble for it. I did, especially when I came to Rory Reid's defense

    http://prgibbons.blogspot.com/2010/10/ed...

    I'm glad to see Ralton has changed his tune on the Las Vegas Sun (a tune he thankfully never really sung on TV) when it comes to spending and reforms. At least I got the impression within this paper he was all about spending more because we've cut to the bone already. It seems he's now more moderate on the Sun, just as he was on TV.

  3. *they raise prices, not taxes.

  4. Chunky says:

    He'd like to see the State balance it's budget without new or additional taxation on the residents or businesses. Shifting tax sources to be "revenue neutral" sounds idealistic but we'd have to see the details.

    What kind of business tax would the state impose upon businesses that would not have a negative impact on their bottom line and consequently their ability to maintain, grow and hire new employees?

    What exactly is "broadening the sales tax base"? Isn't that just another new tax; a tax on services to add to the long list of taxes? As a service based economy now do the people really want to pay tax on services from their doctors, lawyers, barbers, stylists, plumbers etc.?

    Why is it so hard of a concept to only spend to the level of our current revenue? When times were good we spent like there was no end. Now that the economy has cooled off why are we reticent to cut back?

    The state has less visitors, fewer residents and is somewhere along the bottom of a dreadfully slow economy. If the revenue does not support the services and population of "yesteryear", why should we add new or higher taxes to the remaining population to support a standard of living we can't afford?

    That's what Chunky thinks and ponders on this rainy day!

  5. A SERVICE TAX IS JUST INCOME TAX THAT ONLY SERVICE PROVIDERS HAVE TO PAY . IF THOSE OF US IN THE SERVICE INDUSTRY HAVE TO PAY EVERYONE SHOULD

  6. NPRI's current ad campaign is a bunch of garbage. Often esoteric government funded research projects discover important information. Studies of lemurs, for example, have uncovered human learning methodologies.

    A study of "Chinese prostitutes and their drinking behavior," being criticised by NPRI might offer incite into problem drinking modification behavior, that could save the USA billions in accidents, lost productivity and health care costs.

    I bet if someone said they wanted to study mold on rye bread, NPRI would laugh and say it was wasteful? (Rye bread mold = penicillin)

    Oregon raised taxes on the rich and they've seen a slight drop in unemployment, unlike Nevada. We need a millionaire state income tax of 10%, a bigger tax on new "super-cars" (cars over 400 bhp).

    A bigger tax on sugary candies and sodas is in order.

    Also, we need a tax on out of state syndicated talk radio, to raise revenue and spur local content. We also need a tax on think tanks.

  7. Mred,

    You are a busy body minding other peoples business - and you've got the whole world backwards.

    You seem to think its the government that makes every discovery, ever leap forward in scientific progress, every step toward greater living standards. You're wrong.

    Most discoveries and advances are done by the private sector. Even the bulk of government funded research is done by the private sector. In fact, government reports note that they get the biggest bang for the buck by funding research through grants than using their own in-house researchers.

    Besides, penicillin was discovered, by accident, by a Scottish scientist at St. Mary's Hospital in London England. There was no government funded effort to create anti-biotics.

    And stop the "tax tax tax" nonsense. If anything, we need a tax on people who want to stick their nose in other people's business.

  8. Yeah Right, the Koch Brothers (who fund libertoonian causes) don't want people "getting involved in other people's business" so they can have an unsafe corroded gas pipeline that kills a young couple in Lively, TX. http://www.ntsb.gov/publictn/1998/par980...

    The Salk and Sabin polio vaccination programs were government funded. Thank God for the government or you would be spouting your nonsense from an iron lung. If you can read, government subsidized hospitals and universities, the WHO and UNICEF won the battle against polio.

    So when people who want to bring back segregated lunch counters based on private property rights, such as NPRI, Rand Paul, ET AL, ask "What has government ever done?" "Eliminate Polio" is one answer. It wasn't just government by the way, it was "World Government."

    http://en.wikipedia.org/wiki/Polio_vacci...

    We are still waiting for quality data from you on Private Hospitals in the Vegas Area, UMC takes indigent patients, so it is not a benchmark for comparison.

    Do you want to eliminate restaurant inspections? do you like ingesting rat droppings?

  9. Right because businesses want to kill people, especially paying customers. And there is no way anything like Consumer Reports would be around to tel people what works and want doesn't without the government. Oh wait...

  10. I don't know much about polio research Mred, but I do know it made a breakthrough at a private non-profit hospital, not a government hospital.

    You seem to be operating under the fallacious assumption that if government was involved at all, then nothing ever would have happened. That is just wrong. All you do is insert your Captain Hindsight powers...

  11. Private Universities and hospitals got and get all sorts of Government money. Like Stanford, Harvard etc. don't get government money? Or the Hospitals and University listed in the wiki article didn't get government funding.

    Eisenhower. Interstate highway system, urban renewal and polio cure...all done with government funding and direction.

  12. All would be done, could be done and have been done without government money.

  13. Hey Patrick, isn't it great businesses are busting down the doors to get into Nevada, cause it's so business friendly. So what if the schools suck, and the infrastructure is crumbling, they're just pouring in from sick communist bankrupt California aren't they? notsomuch. Are you NPRI guys ever right about anything or is it all about shaping the facts to fit the policy? BTW MRED didn't say everything is from Govt initiatives, but lots of good things are. I think we need a tax on right wing think tanks, who contribute nothing but b.s to our economy.

  14. If we do this right we can help our bottom line for all.

    If not, we may follow in CAs footsteps and begin to drive what businesses we have left... out.

  15. Mixed economy. Government doesn't build the transcontinental railroad, Erie Canal, Interstate Highway system, etc. (or the cochlear implant that Limbaugh wears) It starts the ball rolling, with basic research, and funding. The non-profit sector, educational sector, and private sector do most of the work.

    Name one MAJOR endeavor of mankind in the last 100 years (like the space program) that wasn't aided or started by the government?