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Opinion
Nov. 20, 2007
Copyright © Las Vegas Review-Journal

EDITORIAL: Gamers' patience taxed

They're targeted by two proposed ballot initiatives

Tax revenue shortfalls and dueling initiatives to raise the state gaming tax have Nevada's largest industry playing a prevent defense.

During the keynote address at Thursday's annual luncheon for the Nevada Development Authority, MGM Mirage Chairman and Chief Executive Officer Terry Lanni said competing calls for government budget reductions and tax increases must be answered with a broad-based levy on all businesses. He said the state's current economic hiccup is attributable to Nevada's tax structure, which depends primarily on sales and gaming receipts.

"We must fix the recurring chaos created by this flawed system ..." he said. "We must all face up to the reality of the needs of the state of Nevada in a new century and beyond. The time came long ago for the establishment of a business tax paid by every large business that benefits from operating in this state."

Three days earlier, Boyd Gaming Corp. President Keith Smith said nearly the same thing in a speech to industry executives at the Global Gaming Expo. He said it is patently unfair to make casinos alone pay significantly higher taxes to fund government services used by all Nevadans.

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    • The game plan is identical to the one the gaming industry used in 2003, the last time tax revenue growth slowed and Nevada's political class supported tax increases.

    The end result? A broad-based business levy wasn't part of the record tax increases signed into law, but a half-percentage-point increase in the gaming tax was. State spending skyrocketed. Those increased expenditures boosted the baseline budgets for all agencies, making them practically and politically difficult to cut. Which is exactly what Gov. Jim Gibbons wants to do in the face of sagging revenue growth -- not a revenue decline, mind you, but slower revenue growth that will still leave state budgets bigger than they were last year.

    Because Gov. Gibbons was elected on a pledge to not increase taxes, various special interests are attempting to do so through the initiative process. On Monday, the Nevada State Education Association filed with the secretary of state its petition to increase the gaming tax 3 percentage points, from 6.75 to 9.75 percent. The union wants the new revenue to increase teacher pay and improve classroom resources. A second petition seeking a much bigger increase in the gaming tax could be filed by the end of the month.

    Meanwhile, do gaming executives believe that if they defeat both initiatives and get their broad-based business tax passed by a supermajority of the Nevada Legislature, they will forever immunize themselves from targeted tax increases? Do they think a "reformed" Nevada tax structure will prevent future economic slowdowns and the kinds of revenue blips that leave governments demanding more money?

    In fact, by taking the position that Nevada's taxes should be higher, they're ensuring a repeat of this cycle. Higher taxes mean increased government spending. And increased government spending inevitably leads to higher taxes.

    Nevada governments have more than enough money for their operations -- state general fund spending has grown 70 percent over the past six years, to more than $3 billion per year. Nevada's tax structure has allowed public-sector budgets to grow quickly and predictably over the past decades.

    Nevada doesn't need any new taxes, and the gamers would be wise to say as much.



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    John F wrote on November 20, 2007 08:21 PM: Dennis,

    Terry Lanni is not a politician. He is not an idiot, nor is he a liberal. So why do you ascribe his remarks to politicians, idiots, and liberals?

    Taxes wouldn't all come from "the bottom of the ladder" if we had a flat tax on all types of income. In that case everyone would pay in equal measure.


    dennis1944 wrote on November 20, 2007 04:08 PM: I’ve said it before and I’ll say it again.

    Mr Lanni, I thought you were more intelligent than to say;
    TAX THE BUSINESSES! Sounds good but if you own a business and your taxes increase, you will raise the prices of your products and/or services! In the case of gaming, you will increase the hold. This passes it on down to the consumer (you know, the little guy, you and me). I just love politicians, idiots and liberals who spout this kind of nonsense. All of the taxes collected ultimately come from the bottom of the ladder. I always ask the question; “Where were you and what were you doing when you should have been in your Economics 101 class?” (hope you didn’t inhale) "What we learn from history, is that we learn nothing from history".


    Herb wrote on November 20, 2007 02:55 PM: I am against the gaming industry having to pay higher taxes. I would rather we make drastic spending cutbacks on social programs. When you throw money at dysfunction you just get a whole lot more of it in return.


    Russ wrote on November 20, 2007 02:54 PM: For all of you who don't want the Democrats to raise taxes when they get in office, tell your buddy "King Bush" to quit spending every penny he can get his hands to fund his wars.


    Tom, Burbank wrote on November 20, 2007 10:34 AM: Right on, Douglas. I have many social-left friends who like to think they're 'progressive,' and say they don't mind that all the Democrats have stated they'll raise taxes if elected. They all make good money (GOOD money). When I ask them how much more they're willing to pay to the government, they say that there are many programs that need more money, or other such airy, lofty comments. They NEVER answer the question. Then, when I ask when was the last time they wrote off a check to 'Uncle Sam,' they all say they never have. Each has a tax specialist so they can recoup as much of their money as possible, rendering their philosophical rhetoric merely empty hypocritical blather. Talk is cheap, more taxes are not.


    douglas wrote on November 20, 2007 09:53 AM: those citizens who are certain that their taxes are too low have a remedy at hand.

    with their next 1040 filing, they need only to add whatever amount that will assuage their guilt for being undertaxed.

    if we could only get all the "progressives" in that same boat, it'd be a win-win. the budget shortfalls would evaporate and they'd enjoy a warm and fuzzy feeling.

    a third benefit of course would be that those politicians noticing the extra cash would instantly form blue ribbon, fact finding committees. these to investigate new giveaway programs into which they can flush the new found funds.


    Russ wrote on November 20, 2007 07:19 AM: Mark you need to crawl under a rock. I'm sure you use a number of things every day that were built or are sustained by taxes. Hopefully you will start living by the words you preach. But then you would have to crawl under a rock. Somehow I doubt you would be able to survive.


    FastTracker wrote on November 20, 2007 06:45 AM: The point: gamers WANT higher taxes, they just don't want to be the ones paying them.

    Remember their business model: socialize the costs, privatize the profits.


    Mark wrote on November 20, 2007 06:39 AM: A "fair Share" is nothing. Taxation is extortion and theft. We must fight the greed of the Brians of the world. Let people and corporations keep their own money; they earned it.


    Brian wrote on November 20, 2007 06:02 AM: The Review-Journal does NOT pay ANY taxes. From this article, you'd think they do. They must be afraid we'll come after them next, making them pay their fair share.