Voters never smile upon tax hikes

Less than two decades ago, a relatively unknown state assemblyman named Jim Gibbons authored a simple, one-paragraph tax restraint initiative. His proposal required that any and all tax increases gain a two-thirds supermajority vote of the Legislature in order to pass. Gibbons eventually gathered enough signatures to place this proposal on the statewide ballot, and in the consecutive elections of 1994 and 1996, three of every four voters in Nevada elected to place this amendment in our state's constitution.

After serving three terms in the state assembly, Gibbons was elected and re-elected to serve five consecutive terms in Congress, representing Nevadans from all seventeen counties. Over the next 10 years, he voted more than 250 times to cut taxes at the federal level -- never once voting to increase taxes. As he racked up anti-tax votes, he also racked up election victories. In fact, Gibbons never faced a serious threat from an opponent during his congressional career, consistently winning by margins of approximately 50,000 votes -- in Washoe County alone.

When Gibbons entered the 2006 governor's race, he was declared the early front-runner and quickly became the target of every other candidate's fire. The Nevada Democratic Party picked away at Gibbons early and often, as did then-Gov. Kenny Guinn, a Republican. Yet, even as he took a collective barrage of attacks from his opponents and endured a series of scandals late in the campaign, Gibbons still won.

How? Just as he always had: by promising to keep our taxes low.

This is not an attempt to defend Jim Gibbons, but rather a defense of consistent and strict fiscal discipline, the policy upon which he was elected. It was, after all, Gibbons' position on taxes that gave him a well-defined, easy-to-defend identity. It also gave him an impressive string of political victories that carried him from the state Legislature to the halls of Congress and, eventually, to the governor's office. The voters have had the ultimate say, every step of the way.

Today, voters from all backgrounds are fed up with taxpayer-financed bailouts and the funding of a government that is bigger, more expensive and less responsive. And while leaders from both parties deserve blame, the trust gap is growing wider between our government and those who fund it.

Looking ahead, it appears that a major tax increase will pass both houses of the Nevada Legislature, get vetoed by Gibbons and then return to the Legislature, where his veto will be overridden. This conclusion obviously takes into account that Gibbons possesses little if any political capital, and therefore, most legislators will refuse to stand with him when push comes to shove.

This is where lawmakers should be careful. Any legislator seeking to use Gibbons' unpopularity as political cover when casting their vote to increase taxes will soon find out how little "political cover" exists from those who just had their taxes increased. This debate should not be about either the governor or our individual legislators.

In fact, the governor made it easy by recently saying that the budget is no longer his, and that he wants little if anything to do with it now that it is in the hands of the Legislature. Good enough. The fiscal policies enacted this session will far outlive most of the political careers in Carson City today.

This debate must be about whether a 100 percent increase in Nevada's payroll tax will encourage or discourage businesses to begin hiring again, especially when we have higher than 10 percent unemployment. It should be about whether increasing sales taxes on consumer goods is any way to get consumers spending again. It should be about the impacts of higher property taxes when Nevadans are already struggling to stay in their homes and businesses. It should be about the effects of higher fuel taxes -- keeping in mind what happened last summer when gas prices hit record highs -- significantly deterring consumption, crippling our economic engine (tourism) and ultimately decreasing the amount of revenue collected from already high gasoline taxes.

Tax policy affects consumer behavior. Tax more, and consumers will spend less -- or they'll choose to spend elsewhere. Tax policy also affects voter behavior.

Despite this governor's low approval ratings, increasing taxes remains difficult in Nevada because the voters have made it that way. And while many voters may have abandoned Gibbons, they have not abandoned the policy that got him elected.

We'll find out for sure in November 2010, as voters prepare to cast their ballots, asking themselves, "During the crippling recession of 2008 and 2009, did my legislator rally to defend government's bottom line, or rally to defend mine?"

Robert Uithoven is president of j3 Strategies, a Nevada political and government affairs consulting firm, president of the Western Alliance Fund and a former campaign manager for Nevada Gov. Jim Gibbons.