Back-door tax hike

Tax increases rank as the most controversial and politically costly acts by lawmakers for a very good reason: The removal of greater sums of money from the private economy to support government spending affects investment, job creation and everyone's standard of living. That's why tax increases are debated aggressively during campaigns and again during legislative sessions.

So Nevadans should be surprised and outraged to learn that taxes were raised last week without a full airing and without a full vote of the Legislature.

On Thursday, the interim Legislative Subcommittee on Regulations approved a rule that requires limited liability companies to pay the state's annual $200 business license tax, which is assessed and collected by the secretary of state.

The new regulation prevents LLCs from claiming an exemption to the tax for home-based businesses that earn less than $27,000 per year. Secretary of State Ross Miller, a Democrat, sought the rule because he says hundreds of LLCs wrongly claim the exemption. The new regulation will cost businesses an estimated $10 million per year.

Tax hikes require support from two-thirds of the full Legislature. And the Nevada Constitution prohibits the Legislature from meeting in regular session for more than 120 days every other year. Unless Gov. Brian Sandoval calls lawmakers into a special session, lawmakers won't convene for almost 11 months.

Mr. Miller knows this. That's why he tried to get the same tax hike through the Legislature last year, only to see the bill die. So he took his policy goal through a back door and succeeded -- for now.

State tax collections are ahead of projections. There is no budget shortfall and no reason to pursue an unconstitutional money grab. This action warrants a legal challenge from the business community. If Mr. Miller is desperate for more spending money, let him make the case to voters, then again to the 2013 Legislature.