blank.gif (51 bytes) Taxes
Those Groovin' Tax Groupies
by Knight Allen

hen it comes to the subject of taxes, "groupthink" is alive and well in Nevada. Groupthink is the mindless, unchallenging acceptance of certain assumptions which, if questioned, would prove to be deeply flawed. However, the lockstep and peer-pressure mentality of groupthink prevents any questioning, which in turn leads bright, intelligent and well-meaning leaders to make mediocre policies at best and disastrous ones at worst.

You don’t think Nevada’s political establishment suffers from groupthink?

Nevada Groupthink #1: Nevada’s tax base is "unstable."

This is the tax dogma of our time. It’s repeated so often it has become a kind of religious mantra accepted blindly and obediently by even the best minds in the state.

Fact: Nevada’s tax base is one of the most powerful revenue producers in the country. Consider this: Since 1981 we have experienced two national recessions. During both of them the combined revenue flow to the state’s general fund from the sales and gaming tax rose. That’s right. The revenue rose and it did so without an increase in the rate of either tax. What so-called "stable, broad based" tax structure in this country can match that performance? Also, by the state’s own accounting the general fund receives over one-quarter of its revenue from half a dozen sources other than gaming and sales taxes. Yet in the propaganda about an "unstable" tax base this massive flow of revenue is discounted down to practically zero. Only in government can 25 percent of the revenue flow be reduced to near irrelevancy.

Groupthink #1 is false and must be repudiated.

Nevada Groupthink #2: A "stable, broad-based" tax system is a good thing.

Once Groupthink #1 is entrenched it’s only a small step to this far more dangerous and corrupting idea. What is the goal of a "stable, broad based" tax system? It is to generate a steady, stable, ever increasing flow of revenue to government—regardless of what may be happening to the people. That’s the fatal flaw. The only way to build a "stable" tax base is to strike at the people in as many different ways as possible in those areas of their lives where they must function to support themselves and their families. A "stable" tax base requires high levels of taxation on non-discretionary revenue sources (wages, food, medical care, employment shelter). It’s a cruel and vicious fundamental precept of statism that can be traced all the way back to the pharaohs. It should have no place in our liberal representative republic form of government. Yet, ask any elected official if we should "broaden and stabilize" our tax base and you’ll invariably receive a positive response. It’s scary.

A Better Way

When it comes to taxation our leaders should return to the basic liberal principles on which our system of government was founded: "Don’t tax the necessities of life," wrote Adam Smith, in The Wealth of Nations. "Tax the willing," said Thomas Jefferson.

For the most part, Nevada’s tax base currently conforms to these principles. We generate the bulk of our revenue flow from discretionary sources—the free economic choices made by a free people.

That’s the way it should be and with the help of enlightened leaders hopefully, that’s the way it will state. Hopefully—but don’t bet on it. NJ

Knight Allen, Las Vegas resident and Jeffersonian Democrat, follows Nevada government affairs closely.


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