Jim Clark
Special to the Bonanza

Back to: News
July 27, 2010
Follow News

Jim Clark: Is this the answer for a more equitable tax system?

GOP Gubernatorial Candidate Brian Sandoval was in Incline/Crystal Bay last week to attend a fundraiser hosted by many of our community’s leading citizens. It was held at the home of Bruce and Nora James. Also in attendance were Lt. Governor Brian Krolicki, the winners of the GOP Primary Election to represent Incline/Crystal Bay in the legislature, the superintendent of schools and the president of the county school trustees.

Sandoval emphasized his commitments to: restructure education to achieve more efficient use of dollars spent, vastly increase the educational choices available to parents and students and implement the 44 recommendations made by the bipartisan Spending and Government Efficiency Commission (headed by Bruce James) to reduce government costs. His plan to close any budget deficit in the coming biennium is to woo new businesses to Nevada. He identified himself and Brian Krolicki as the “killer ‘B’s” when it comes to aggressively attracting commercial enterprises to the Silver State.

Neither Sandoval nor Democratic Gubernatorial Candidate Rory Reid have announced any specifics for dealing with an expected 2010-11 budget shortfall which could range anywhere from $800 million to as much as $3 billion. It’s not surprising that both candidates have pledged not to raise taxes or that neither wants to get specific about spending cuts because, after all, they want our votes. Regardless of what Rory Reid says about taxes, Democrat Senate Majority Leader Steven Horsford is openly talking about a corporate income tax and tax laws originate in the legislature.

Fortunately for the Silver State, Nevada Policy Research Institute has fully examined the budget and has come up with a comprehensive proposal for a more equitable tax system that will be substantially less vulnerable to economic cycles and will deal with the projected budget deficits.

They note that the 2003 and 2009 tax increases indiscriminately hit businesses pretty heavily; individuals were generally spared direct tax increases because our state constitution prohibits personal income taxes. The result was to make Nevada a less attractive venue for businesses seeking to relocate. Moreover the NPRI study showed that Nevada is largely reliant on tax sources which are highly correlated to the business cycle guaranteeing budget deficits in down times. That in turn causes tax consumers (teachers, state employees, etc.) to scream for tax increases, and, as at present, the legislature then noses around for more business taxes because they can’t tax individuals. The result is a vicious cycle that increasingly cripples Nevada’s ability to bolster its economic base by attracting new businesses.

NPRI has come up with a series of proposals which will inflict a little pain on everyone, relieve pain for some, and keep the patient alive. They are: (1) eliminate the present business tax, (2) eliminate the present tax on insurance premiums (Currently this is the third highest revenue producer; Nevadans pay much more for insurance than citizens of other states which will really hurt when Obamacare kicks in fully and individuals are required to carry health insurance); (3) broaden the sales tax base to include all products and services and lower the tax rate to 3.5 percent, (4) implement priority-based budgeting, and (5) enact spending controls that limit state spending increases to the rates of inflation plus population increase. Based on present revenues these proposals will balance the budget and keep it balanced going forward.

On November 3rd of this year one of the candidates will be governor-elect and will have to produce a balanced budget. The NPRI plan should be the first thing he looks at.

— Jim Clark is president of Republican Advocates, a vice chair of the Washoe County GOP and a member of the Nevada GOP Central Committee. He can be reached at tahoesbjc@aol.com.

Stories you may be interested in

Tahoe Daily Tribune Updated Jul 27, 2010 10:57AM Published Jul 27, 2010 10:56AM Copyright 2010 Tahoe Daily Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.