A story in today's Review-Journal reports that, surprise, surprise, the record-setting, $833-million tax increase enacted by last year's Legislature is causing banks and small businesses to scramble. Non-banking businesses are chafing at the 0.7 percent payroll tax (which replaces the $100 annual per-employee "head tax"). Banks are reeling from both the new 2 percent payroll tax and the new $7,000 per-branch licensing fee. Hit particularly hard are Nevada's smaller, private banks, some of which may have to lay off employees or close branches in the more-isolated hamlets in the state.
While no one who lives in this universe should be shocked, the response of pro-tax Democrats (sorry, I repeat myself) to the news is downright disgusting. Assembly Taxation Committee Chairman David Goldwater and Senate Minority Leader Dina "Cross of Gold" Titus are feeling the pain of hard-hit businesses ... a little. Both lawmakers say the taxes they preferred would have hurt much less -- but that if companies want to gripe about the structure of the tax code, they should look in the mirror: "(W)e fought like crazy to keep (the payroll tax) out, but it's what the businesses wanted," Goldwater mewled, noting that the state's nongaming businesses screamed to high heaven about imposing an alternative, a gross-receipts tax. "They got what they wanted, and now they're complaining about it." Titus said that if businesses would have lined up in lockstep with the big casinos and backed the GRT, they'd have nothing to complain about.
Wait a minute. If a robber holds a gun to your head, demanding your money or your life, and offers alternative payment plans, you'll pick the one that's less onerous, even though you really don't "want" either option. It took one regular and two special sessions of the Legislature to jam this tax package through, and the notion that any business owner eagerly embraced the final plan is pure fantasy.
Asserting that the GRT would be the only tax that would have applied to businesses is also a lie. Kenny Guinn's initial proposal would have tripled the head tax to $300 a year, which would have more thoroughly pummeled companies that pay modest wages. (The payroll tax was suggested by business groups as a way to ease that tax bite.) The tripling would have amounted to a 2.3 percent payroll tax on businesses that pay $6.25 an hour. You have to offer a salary of $43,000 a year, or roughly double the average pay statewide, before a $300 head tax would be less burdensome than a 0.7 percent payroll tax.
The final outrage is that the entire tax hike was unnecessary, as Assemblyman Bob Beers and anti-tax activists pointed out. Before the session convened, revenues were expected to grow by more than $300 million over the budget cycle. Those projections have since been scrapped, as taxes are flowing at a higher-than-expected rate into state and local coffers. But, of course, the political establishment has no interest in taking a mulligan and repealing the entire lot.
Meet the principals
Today's R-J also includes interesting and informative profiles of Southern Nevada's three most prominent critics of expansive government: Knight Allen, the somewhat reclusive "Jeffersonian Democrat" who's constantly armed with facts and figures underscoring official profligacy and abuses of power; Dan Burdish, the openly gay, self-described GOP bomb-thrower who's a relentless critic of big-spending Republicans and a thorn in the side of the religious right; and George Harris, the publicity-hungry Republican crusader whose e-mail fusillades (which can play fast and loose with the facts) annoy friend and foe alike. The package is well-done and, from my limited contacts with all three, seems to capture them all fairly. It's a useful way to discover what makes these men tick.
Also ...
Las Vegas Councilwoman Lynette Boggs McDonald offers her views on the debate over public employees serving in the Nevada Legislature. Money quote:
The only successful arguments to declare the separation of powers position moot is to argue either that the Nevada Constitution does not apply to local governments or its employees or that city employees are somehow members of the legislative branch.
Read it here.
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