Getting The Level Of Nevada Government We Can Afford
By: Doug Busselman, Executive Vice President
While we should hold no illusions that the current majority party, in charge of the Nevada Legislature, would very much like to raise taxes in the 2011 Nevada Legislative session and continue with their unbroken streak of growing the size of Nevada’s expenditures – this recent warning from the Tax Foundation will hopefully give some sense of caution. The Fact Sheet, authored by Joseph Henchman, makes a very strong admonition “The state should be careful about its options, as its ability to attract investment and capital depends greatly on its favorable tax climate.”
A lot of the current mindset about what might come up in the 2011 Legislative Session is the not so veiled ideas that the Senate Majority Leader, Senator Steven Horsford, has been considering as being a “fair” approach to establishing a Nevada tax structure that doesn’t yield revenue hardships for state government when the economy isn’t booming. Supposedly, government should never expect to get by with less and all it will take is the right taxing system and this won’t be a problem for legislators to have to contend with.
The Tax Foundation’s report clearly establishes that there is no magic tax formula that doesn’t feel the hit of downturns. It also firmly documents that the specific new taxes Horsford is thought to favor (Corporate Income Tax or Gross Receipts Tax) are not what anyone who cares about the state’s economy would consider.
Somewhat building on the concepts of the Nevada Policy Research Institute’s “One Sound State, Once Again” proposal for a broad-based, low rate sales tax, the Tax Foundation indicated that “a properly structured sales tax applies to all consumer purchases of goods and services, but not to business purchases.”
The report goes on to explain the reason for not including business purchases in their view of a properly structured sales tax -- “The purpose of this exemption is not to promote business in general but rather to avoid the double taxation of some products.”
One of the ideas for how Nevada’s taxing and spending should be operated, came out in comments offered by the Nevada Taxpayers Association President, Carol Vilardo, speaking at a meeting of the Nevada Stakeholders Group. She offered the idea that Nevada’s approach needs to be sustainable.
This is one of the foundational building blocks from the Nevada Spending and Government Efficiency Commission (SAGE), which Vilardo served as a member.
In the first chapter of the SAGE Commission’s book “Bipartisan Directors for Nevada’s Future”, the simple message (highlighted in the Chapter Title) “The Status Quo is Unaffordable”. At the bottom of the same page the observation is very similar – “The status quo in Nevada’s state and local governments is simply unstainable.”
The concept of sustainability is extremely well embraced by those who seem to think it’s a great approach to everything but government. Although the limits of government should be based on something more definite than politically-correct warm and fuzzies…there might be elements that can be extracted from the supposed proper “Sustainable Development” idea which has been defined in the past as being “…development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” This diagram offers the pictorial perspective of the confluence of various considerations for a sustainability that factors in environment, social and economic interests.
Perhaps with adjustments for the title categories of “Social” – “Environment” – “Economic” a model can be considered which plots the appropriate degrees of government and the ability of the private sector to pay for those constrained and limited levels of “service”.
While we should hold no illusions that the current majority party, in charge of the Nevada Legislature, would very much like to raise taxes in the 2011 Nevada Legislative session and continue with their unbroken streak of growing the size of Nevada’s expenditures – this recent warning from the Tax Foundation will hopefully give some sense of caution. The Fact Sheet, authored by Joseph Henchman, makes a very strong admonition “The state should be careful about its options, as its ability to attract investment and capital depends greatly on its favorable tax climate.”
A lot of the current mindset about what might come up in the 2011 Legislative Session is the not so veiled ideas that the Senate Majority Leader, Senator Steven Horsford, has been considering as being a “fair” approach to establishing a Nevada tax structure that doesn’t yield revenue hardships for state government when the economy isn’t booming. Supposedly, government should never expect to get by with less and all it will take is the right taxing system and this won’t be a problem for legislators to have to contend with.
The Tax Foundation’s report clearly establishes that there is no magic tax formula that doesn’t feel the hit of downturns. It also firmly documents that the specific new taxes Horsford is thought to favor (Corporate Income Tax or Gross Receipts Tax) are not what anyone who cares about the state’s economy would consider.
Somewhat building on the concepts of the Nevada Policy Research Institute’s “One Sound State, Once Again” proposal for a broad-based, low rate sales tax, the Tax Foundation indicated that “a properly structured sales tax applies to all consumer purchases of goods and services, but not to business purchases.”
The report goes on to explain the reason for not including business purchases in their view of a properly structured sales tax -- “The purpose of this exemption is not to promote business in general but rather to avoid the double taxation of some products.”
One of the ideas for how Nevada’s taxing and spending should be operated, came out in comments offered by the Nevada Taxpayers Association President, Carol Vilardo, speaking at a meeting of the Nevada Stakeholders Group. She offered the idea that Nevada’s approach needs to be sustainable.
This is one of the foundational building blocks from the Nevada Spending and Government Efficiency Commission (SAGE), which Vilardo served as a member.
In the first chapter of the SAGE Commission’s book “Bipartisan Directors for Nevada’s Future”, the simple message (highlighted in the Chapter Title) “The Status Quo is Unaffordable”. At the bottom of the same page the observation is very similar – “The status quo in Nevada’s state and local governments is simply unstainable.”
The concept of sustainability is extremely well embraced by those who seem to think it’s a great approach to everything but government. Although the limits of government should be based on something more definite than politically-correct warm and fuzzies…there might be elements that can be extracted from the supposed proper “Sustainable Development” idea which has been defined in the past as being “…development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” This diagram offers the pictorial perspective of the confluence of various considerations for a sustainability that factors in environment, social and economic interests.
Perhaps with adjustments for the title categories of “Social” – “Environment” – “Economic” a model can be considered which plots the appropriate degrees of government and the ability of the private sector to pay for those constrained and limited levels of “service”.
Posted by Doug Busselman at 7/16/2010 2:38 PM 
Categories: Nevada State Spending
Tags: Nevada Budget State Spending Taxes 2010 Election Government
Categories: Nevada State Spending
Tags: Nevada Budget State Spending Taxes 2010 Election Government
Making businesses sacrosanct from taxes is ludicrous, while foisting the tax burden onto individual is total crap. A low tax distributed across both individual AND businesses will gather the funds necessary to maintain the infrastructure our higher populace needs. While government spending should always be reviewed for pork, we are now seeing the consequences for allowing uncontrolled growth. You invite a lot of people in, and don't consider what it takes to serve that larger population, this is what you get.
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