VICTOR JOECKS: Why Nevada Republicans should propose raising the gaming tax
Politics is about building coalitions to advance your core principles. That’s why Republicans should propose increasing the gaming tax to lower the sales tax.
Politics is about building coalitions to advance core principles. That’s why Republicans should propose increasing the gaming tax and lowering the sales tax.
The Vegas Chamber recently released endorsements in statewide races. You might think its selected candidates would support the values it claims to champion, such as fostering “economic growth and job creation.” Nope. The Chamber endorsed Gov. Steve Sisolak. You may remember him as the man who kept businesses closed for months in 2020. His initial shutdown order led to the highest unemployment rate — a staggering 28.2 percent — of any state since consistent records began in 1976. Two years later, Nevada’s unemployment system is still struggling to pay claims.
Even though it was wrong, his initial decision was defensible. There were many unknowns at the beginning of the coronavirus pandemic. But as other states reopened, Sisolak kept Nevada shut down. Even after reopening, he kept imposing restrictions. Little wonder Nevada still has one of the highest unemployment rates in the country.
For a business group to endorse a governor with such a record is stunning. But it fits a long-running pattern. The Chamber routinely endorses Democrats and Republicans who vote for higher taxes and more regulations. During the 2015 legislative session, the group endorsed the largest tax increase in Nevada history, including the creation of the commerce tax.
This is a problem for conservative candidates. It’s much harder to win when groups that should be your ideological allies support candidates who actively oppose your supposedly shared interests.
Instead of standing up for its stated principles, the Chamber keeps trying to curry favor with Democrats and big-government Republicans. This strategy is akin to a sheep bribing a wolf to eat it last. The gaming industry, which dominates Nevada’s economy, loves this approach.
This reality necessitates a strategic shift among small-government Republicans. The foundational principle of fiscal conservatism is limited, accountable government. That requires some tax revenue, although less than Nevada takes in now.
Notice the key ideal isn’t keeping one specific tax low. Ideally, all taxes will be low. But low taxes on a particular industry are a byproduct, not a goal. That means there’s space to maneuver on specific taxes. For instance, Nevada has one of the highest sales taxes in the country. Our gaming tax is one of the lowest.
Republicans should propose a revenue-neutral tax restructuring. Increase the gaming tax to offset a half or one-percentage point drop in the sales tax. You could increase it further to raise the threshold of the commerce tax or eliminate it.
You could remove the 8 percent property tax cap on major properties along the Strip while lowering the cap on residential properties to 2 percent. Raise the room tax to offset the sales tax increase that goes toward more cops in Clark County. For good measure, raise taxes on trial lawyers while reducing the tax on car registrations.
These ideas would likely poll above 80 percent, especially if the gaming industry keeps performing well. If the gamers attack, Republicans could claim that corporations are attacking them for fighting for the working class. Electorally, that’s a good trade. It would help Republicans continue to woo those voters.
Imagine how much fun a Republican could have running for governor on a platform like this.
Being pro-free market means being pro-competition, not reflexively pro-big business. Many large corporations want to use the power of government to enrich themselves at the expense of their competitors and the general population.
That certainly happens in Nevada. Republicans should shift their policies and priorities accordingly.
Contact Victor Joecks at email@example.com or 702-383-4698. Follow @victorjoecks on Twitter.