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Liberal coalition urges overhaul of 'unfair' state tax system

Nevada’s tax structure is fundamentally unfair, burdening the poorest residents the most while letting the rich and big business largely off the hook, according to a new study by a local liberal coalition.

The report released today by the Progressive Leadership Alliance of Nevada calls for a top-to-bottom overhaul of taxation in the state to spread the tax burden more equitably.


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  • Chief among its proposals are a new tax on business profits and increasing the amount paid by mining companies. Along with other reforms, the group says its recommendations would generate nearly $1.3 billion for the state’s general fund, monies PLAN says are needed to shore up education and state services.

    “Nevada’s tax system is not just broken, it’s also fundamentally unfair, balancing the state budget on the backs of those who can least afford it while shielding some of the state’s biggest, and most profitable, businesses from any meaningful taxation whatsoever,” the report contends.

    As the Legislature prepares to convene facing a massive budget shortfall due to plummeting revenue, the group says it is time to increase taxes rather than continuing to cut state services that it says are already insufficient.

    State revenue is overly dependent on sales and gaming taxes. The former hit poor families the hardest, while the latter are highly unstable, PLAN says.

    Meanwhile, certain industries are barely taxed at all, like construction, which makes up 9.3 percent of the state’s gross production while paying 1.1 percent of its taxes.

    Services, manufacturing and mining similarly pay disproportionately low rates, while entertainment and sales, both wholesale and retail, pay much more than their share in taxes, the report concludes.

    One remedy for this, according to the report, would be to institute a tax on businesses’ net profits, which nearly all other states impose. PLAN suggests a 5 percent tax on businesses with profits of $50,000 to $100,000 and a 7 percent tax on profits of $100,000-plus, which the group estimates would bring in $194 million in revenue.

    The massive multinational mining corporations that are doing booming business in the gold mines of Northern Nevada deduct everything from insurance to marketing from their gross production revenue, so that some years they report zero net proceeds, the report finds. The mining industry, according to the report, experiences an effective tax rate of 0.5 percent.

    By tightening the rules on allowable deductions, the state would generate an additional $141 million annually, the report states.

    Other recommendations in the report include:

    * Doubling the modified business tax, from 0.63 percent to 1.26 percent, for $279 million in annual revenue;

    * Requiring casinos to pay sales tax on comped meals, generating $140 million per year in taxes;

    * Increasing the hotel room tax by 3 percentage points, a measure proposed by the teachers union and approved by voters in Clark and Washoe counties in the November election, which would bring in an estimated $125 million annually;

    * Charging a 3 percent tax on capital gains, interest and dividends over $200,000 per year, raising $380 million in new revenue.

     

    Contact reporter Molly Ball at mball@reviewjournal.com or 702-387-2919.

     

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    fastest way to make las vegas money wrote on January 13, 2009 01:39 AM:
    stop allowing casinos to use boarding pass style cards for customers to hold balances on.

    residents walking around with a worthless piece of plastic, while the casino has your real money in pocket to increase their bank accounts,to buy up land and make interest on, leaves las vegas stuck with zero $.

    google
    fiat currency and fractional reserve lending,


    Boxy wrote on January 12, 2009 09:11 PM: Dude,

    How are we subsidizing Wall-Mart constructing retail centers in California?

    That has to be some of the most absurd logic.

    Furthermore, there is a difference in corporate income taxes (a tax on net profit) and gross income (or gross revenue) taxes which this report seems to desire for the mining industry here.

    Gross revenue taxes are just plain stupid.


    Dude wrote on January 12, 2009 08:56 PM: The mining companies "are simply going to walk away"? They're going to mine for gold in Delaware? Nope, they make $900 an ounce based on what they take from the ground here at home. That's where the gold is. And Sarah Palin's got it right on this one: We need to tax them well because this is a non-renewable resource.
    The miners are happy to export their profits out of state, out of country, and leave a mess to take care of. We get one taste of those profits. We need to take it now. In Alaska, they hit the extractive industries for 20 percent! The great libertarian bastian looks more like the social welfare state.
    Same with the discount retailers, who are making a ton of cash now. Why should we be subsidizing Walmart's construction in California? Let them give some back.
    Better schools, better health care, taxes that don't put the burden on the working class - that equals more investment and a healthier economy for Nevada.


    jlb wrote on January 12, 2009 08:39 PM: The liberal greed never stops.


    artie wrote on January 12, 2009 08:23 PM: "Why did we experience such an economic boom over the last 10-15 years... because our State had excellent business conditions... what did we do with that boom in our government... we wasted it rather than invested or saved it..."

    Seems to me we live in the same state with the same business conditions. But now it's bust. So must be that your theory doesn't hold water.

    What happened? The government allowed mortgage companies to run amok because conservatives love "deregulation" and creating "a healthy business climate."

    Well, they surely did create a climate, didn't they. I don't see those mortgage companies or agents paying for it. Why should they? They were just doing business, and business is God, and we just love anybody who can make money doing anything no matter who they scam, exploit, or screw. Ever hear about that colonoscopy center? Hey, now, there was a great business climate, right? No oversight! We just love our successful business people.

    It's hard to invest and save when the company owners are making all the money and the workers don't make enough to go beyond paying basic bills, if they're lucky enough to even manage that.


    By the way, the "government" didn't boom, business owners did. There are other states who tax and regulate businesses more than this one. No, they didn't have the biggest boom - and they're not having the biggest bust, either. But those poor people suffer terrible things like good public parks and education systems, a little oversight of medical facilities, and more job security. Watch out! All those decently educated people who have some recourse if their boss fires them on a whim, they're all going to be busting through the borders to get to this state.

    Thanks, David, for bringing some enlightened, common sense thinking to this den of boors.


    Goose Killers wrote on January 12, 2009 08:11 PM: Careful on killing the Golden Goose my misguided Liberal friends. If your answer to everthing is Tax the Rich, what will you do if they simply move away? You see, the state you live in is a choice. The same people who took initiative, gave the effort, and took the risk are the same ones that have the means to pull-up stakes and move on to a friendlier place (people and businesses). Take away the advantages of living here, replace them with welfare debt, and you will be stuck holding the bag. Just a note, people don't live here for the high crime rates, breath-taking barren desert scenery, low quality school system, corrupt politicians, and mild summer temperatures; its Money.


    EYES WANTS ME WELFARE wrote on January 12, 2009 07:06 PM: Eyes be a good democrat. I'm dumb, stupid, out of work, and I continue to vote for every democrat that has no experience.

    When will eyes be getting my welfare increased like that Hussein guy promised???


    Stay on topic PATTY wrote on January 12, 2009 07:01 PM: Patty...
    Stay on topic honey --- the subject was taxes, not your favorite subject --- GAY RIGHTS!


    No New Taxes on Me! wrote on January 12, 2009 06:52 PM: My view on new taxes.

    There should be a happy medium here. Nevada needs to significantly raise taxes on everyone, with the exception of me. I would like to see everyone else's ox get gored here,, but leave my beast of burden alone.

    Cut teacher's pay and school maintenance budgets, except for my neighborhood school.

    Get rid of most of the police and firemen, except those in my neighborhood.

    Stop spending money on street repairs, except for the ones I drive on.

    Sorry folks,, the time has come to raise taxes.




    Patrick wrote on January 12, 2009 05:33 PM: You know what is funny about Madoff, the government regulators at the SEC investigated him 6 times and found no wrong doing...even though his competitors had put together reports on how he was possibly running a ponzi scheme.

    Let me repeat that...the government regulators investigated him 6 times and still failed to stop it!!!!

    6 times.


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