‘Everybody in the state is paying no taxes’?
Jim Rogers is one of our favorite public officials. The frank chancellor of the state’s higher education system doesn’t subscribe to the culture of political correctness that dominates the college campuses he oversees. And he’s on the money when he says UNLV and UNR must raise their admission standards it they’re to become elite universities.
But Mr. Rogers’ gift of gab sometimes leads to overstatements. Take his recent pleas — and outright demands — for increased taxpayer funding. He has characterized reductions in proposed spending increases as “cuts.” His desire to grow Nevada’s higher education system faster than state government as a whole (not to mention the private-sector economy), coupled with his lack of success in persuading Gov. Jim Gibbons and lawmakers to go along, has prompted him to spout exaggerations and outlandish ideas.
During a Tuesday interview on KNPR-FM’s “State of Nevada” program, Mr. Rogers suggested it was time for Nevada to institute individual and corporate income taxes. He vented further in an interview with the Las Vegas Sun: “We have no corporate income tax, as such. We have no individual income tax. … So everybody in the state is paying no taxes. And it just doesn’t work.”
It’s true that Nevada doesn’t have income taxes — it’s forbidden by the state constitution and remains so because Nevada’s casinos supply so much revenue to state and local governments.
But if he thinks nobody in the state is paying taxes, we’d like to live in Mr. Rogers’ neighborhood. The Nevada treasury is awash in a nine-figure general fund budget surplus, and state spending has grown more than 60 percent over the past six years. When the Legislature finally passes a budget for the coming two years, it will be nearly $1 billion larger than the one OK’d in 2005.
In fact, because Nevada is among the few states that have no income tax, its sales tax rate is among the highest in the country — in Clark County, the rate is nearly 8 percent. Nevada’s gasoline tax burden is also among the highest in the country.
Nobody pays taxes? Here’s an alphabetical list of some of the taxes that keep Nevada governments flush with revenue: bank branch tax; car rental tax; cigarette tax; entertainment tax; gaming tax; incorporation taxes; insurance premium tax; jet fuel tax; licensing taxes; liquor tax; livestock tax; lodging taxes; mining taxes; per-employee business tax; public utility taxes; sales tax; tire tax; unemployment insurance tax; and the oh-so-unpopular vehicle registration tax.
Make no mistake, you’re paying taxes every day, every possible way.
Seeking the creation of personal and corporate income taxes would require voter approval. However, the state ban on income taxes is perhaps the most bulletproof provision of the constitution.
Mr. Rogers has no hope of enacting such levies.
Rather than suggest political nonstarters, Mr. Rogers’ frustrations would be better channeled pursuing long-term savings and reforms in wasteful government spending. There’s no better place to start than Nevada’s $10 billion deficit in promised public employee retirement benefits.
Government workers receive generous defined-benefit pensions and health care subsidies, and they can retire up to 20 years before common workers are eligible for Social Security. Forcing future government hires to participate in a defined-contribution retirement plan, like a 401(k) account, and eliminating health care subsidies that don’t exist in the private sector, would save taxpayers billions of dollars in the decades ahead.
If Mr. Rogers is fired up about funding levels today, we can’t wait to see his reaction several years down the road when lawmakers announce they have to raise taxes and cut his budget to pay people who don’t work for the state anymore.