Despite what you may be hearing from some Assembly Republicans now praising the successes of the 2015 Legislature, there are consequences to voting for the $1.4 billion tax hike, the largest in Nevada‘s history. That hike comes complete with a brand new gross receipts tax very much like the one 79 percent of Nevada voters rejected at the ballot box just last November. What happened in the Legislatureâs 2015 session?
This was a historic opportunity for Republicans, who had complete and total legislative control for the first time since 1929. As such, this was a wasted opportunity to really distinguish Republican ideals of low taxes and smaller government from Democratic ideals of more taxes and growing a government that can never be big enough.
Even the most important education reform bill passed by the Legislature the creation of Education Saving Accounts that parents can use for private school tuition was bungled by refusing to allow parents who already have children in private schools to set up an ESA without first yanking their kids out of their current private school and forcing them into a public school for 100 days. In addition, the ESAs donât apply to home-schoolers unless, again, the kids are first forced into a public school for 100 days.
But back to the largest tax hike in Nevadaâs history and the creation of this new gross receipts tax that Gov. Brian Sandoval and others misleadingly call the âcommerce tax.â No matter how hard they try to spin this and no matter how loudly they claim the commerce tax isnât the same as the margins tax rejected last November by voters, remember this: Even companies that donât make a profit are now going to be forced to pay this tax.
As Ronald Reagan once noted: Some say shift the tax burden to business and industry, because business doesnât pay taxes. But business must pass its costs of operations â including taxes â on to the customer in the price of the product. Only people pay taxes, all the taxes. Government just uses businesses in a kind of sneaky way to help collect the taxes.â
âSneaky way,â indeed. So this package of tax hikes passed by a majority of Assembly Republicans (10 voted against the tax increase) is not, as they misleadingly claim, going to require âgreater sacrificeâ from Nevadaâs business community, which is still recovering from the Great Recession. The $1.4 billion worth of higher taxes are going to be paid by you and me, one way or the other.
These tax-raising Republicans are saying, âIt would have been easy to say no to difficult reform, increased spending or new taxes. Wrong! It was easy to say no to truly âdifficult reform." It was easy to increase spending of other peopleâs money. It was easy raising taxes on Nevadans by pretending they were raising taxes on business. This session, under complete Republican control, was supposed to be different. Instead, Assembly Majority Leader Paul Anderson engineered a tax hike so massive that even Democrats, in their wildest dreams, couldnât have envisioned it passing.
The 2015 Legislature deserves the booby prize.
While Nevada companies were going out of business or dramatically reforming their operations by cutting personnel and expenses to survive the Great Recession, Nevadaâs state government and employees escaped relatively unscathed. Instead of necessary layoffs and reductions in certain pay and benefits, many government employees got extra days off without pay. Fiscally conservative and responsible decisions to reduce personnel and pay would have been difficult, not raising taxes to eliminate the furloughs and giving those state workers raises.
Most importantly, there were plenty of alternative ideas put forward by State Controller Ron Knecht, State Treasurer Dan Schwartz and a number of conservative Republican legislators to fund a budget of essential services without raising taxes. Pursuing those kinds of reforms would have been difficult. Instead, Anderson and friends took the easy way out and increased spending by increasing taxes.
Welcome to Gov. Brian Sandoval‘s New Nevada.
Diana Orrock is a Republican national committeewoman for Nevada.