Just keep it coming

Since lawmakers cleared out of Carson City in early June, we haven't heard much about the need to "stabilize" Nevada's tax base. But rest assured, the rhetoric will ramp up again as we approach the 2011 legislative session -- or even sooner, should a special legislative session be needed to deal with continued declines in sales and gaming tax receipts.

For almost three decades, It's been a cherished doctrine of the liberal political establishment that Nevada could better navigate economic storms if only it featured a "broader" tax base -- meaning a state income tax, higher and new levies on business, or some combination of the two.

This thesis has become an article of faith among those who believe that Nevada's maturation depends upon a thriving public sector offering "services" of every kind to its residents.

Unfortunately, this doctrine has a couple of glaring flaws that bear repeating, given the relentless nature of its proponents.

First, it focuses only on the revenue side of the equation, completely ignoring the role that spendthrift politicians play in creating budget difficulties. By ramping up spending during the good times, lawmakers inflate baseline budgets to the point that they become unsustainable when the economy slows.

This has been the pattern in Nevada for the better part of two decades -- and there's no indication this will ever change.

Second, and equally important, however, there is no state in the union that has crafted a "recession-proof" tax structure -- and many have tried. Nevada revenues, in fact, have been remarkably consistent over recent times, more so than tax collections in many states that feature a wide variety of levies.

We need only look once again to our Western neighbor for confirmation of this.

In California, the Los Angeles Times reported this week, a 14-member panel has been meeting since the beginning of the year to discuss taxes. "The big focus," the Times reports, "is reducing the state's tax volatility, which arises in large measure from the reliance on personal income tax, particularly revenue generated by top wage earners."

In other words, even California -- which taxes virtually everything that moves and features an array of levies that Assembly Democrats here would salivate to impose in Nevada under the guise of "broadening the tax base" -- doesn't have a tax system that satisfies those who crave "stability."

Perhaps that's because the actual goal isn't "stability," but simply to keep more and more money flowing toward the public sector, regardless of the condition in which those who pay the bills find themselves.