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 dont think Nevadas political establishment suffers from groupthink?Nevada Groupthink #1: Nevadas tax base is "unstable."
This is the tax dogma of our time. Its repeated so often it has become a kind of religious mantra accepted blindly and obediently by even the best minds in the state.
Fact: Nevadas 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 states general fund from the sales and gaming tax rose. Thats 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 states 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 its 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 governmentregardless of what may be happening to the people. Thats 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). Its 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 youll invariably receive a positive response. Its 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: "Dont tax the necessities of life," wrote Adam Smith, in The Wealth of Nations. "Tax the willing," said Thomas Jefferson.
For the most part, Nevadas tax base currently conforms to these principles. We generate the bulk of our revenue flow from discretionary sourcesthe free economic choices made by a free people.
Thats the way it should be and with the help of enlightened leaders hopefully, thats the way it will state. Hopefullybut dont bet on it.NJ
Knight Allen, Las Vegas resident and Jeffersonian Democrat, follows Nevada government affairs closely.