Sunday, July 06, 2003

Bye, bye free checking

A deal that would break the state's budget impasse has apparently been struck by a dozen-member group of lawmakers meeting privately in Carson City. Details are secret for now, but the primary new/different tax that would be imposed is a 3 percent "franchise fee" (a corporate income tax) on banks. It's the only version of a revenue-based tax that might squeak through both houses of the Legislature, but consumers will no doubt pay a hefty price if it does.

Free checking? It'll either disappear altogether or be available only to those who hold multiple accounts with hefty minimum balances. Talk to a teller for free? Forget it. Online and telephone banking? Sure, if you pay per transaction. Glad we have our money in out-of-state banks.

While casinos. public employee unions and their water-carriers in Carson City have accused banks of not paying their "fair share" of taxes, the willfully ignorant here forget this basic fact: The state's consumption-based revenue system has encouraged the development of a burgeoning financial services industry ... and it brings high-salaried people who pay lots of taxes -- property taxes for the nice homes they buy; sales taxes on meals, shows, clothing, home furninshings; even gaming taxes when they go to the casinos for a little fun. What's more, I'd bet a disproportionate number of these professionals send their kids to private schools, so they don't drain public coffers to the extent lower-paid casino workers do.

Of course, once the franchise tax takes effect, the financial services boom will end. Those highly paid, high-taxpaying employees will leave the state. And the political establishment will clamor for a new source of taxes to feed the insatiable bureaucratic beast. Thanks, gamers.

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