Week in Review: Tax reform
Every week, NPRI President Andy Matthews writes a column for NPRI's week-in-review email. If you are not getting our emails, which contain our latest commentaries and news stories, you can sign up here to receive them.
Did you hear? Liberal Nevada legislators are thinking of abolishing the modified business tax and just taking control of business owners’ bank accounts.
OK, OK, that’s not really what they plan to do — I hope — but I can’t help thinking of that joke when I read incoming legislators and media speculating about what “tax reform” in Nevada might look like in the coming session.
It seems that many — be they elected officials or liberal political commentators — don’t want to acknowledge that “reform” isn’t synonymous with “hike.”
This is an important distinction, because knowing that tax hikes aren’t popular, many politicians try to disguise their intentions to raise taxes by talking about how they want to change or update the tax structure.
That’s why the release this week of an executive summary of a report prepared by the nonpartisan Tax Foundation for the Las Vegas Chamber of Commerce is so important.
While the Chamber will release its full report in the next few weeks, the executive summary contains an important recommendation.
Nevada should consider fixing what is broken with the current tax system instead of pursuing a brand new tax to layer on top of the narrowly based, complex existing taxes.
It then gives some broad-stroke reform ideas based, in part, on recommendations NPRI first put forward in our One Sound State, Once Again tax-reform study.
As NPRI’s Director of Research and Legislative Affairs Geoffrey Lawrence laid out in a column for the Nevada Business magazine, the Silver State needs revenue-neutral tax reform that:
- minimizes revenue volatility so officials know what to expect when budgeting
- minimizes distortions in economic behavior
- minimizes compliance costs
- protects tax equity
- reflects the character of the economy
As the Chamber notes, that doesn’t require new types of taxes, but reforming the ones we already have in place, including a broadening of the sales tax base while lowering the rate.
It is still worth keeping a close eye on the Chamber’s final recommendations, because it hasn’t announced whether it wants to pursue reforms that are revenue-neutral or reforms and tax hikes.
Regardless, these substantive recommendations have liberals changing their tune on tax reform. For instance, a liberal columnist at the Las Vegas Review-Journal seems flummoxed by the idea that tax reform might include something other than implementing a new tax, like a corporate income tax.
So, when liberals claim free-market conservatives are against tax reform, they’re simply wrong. There are plenty of tax reforms — like those we’ve set forth — that would garner the support of fiscal conservatives.
Conservatives oppose tax hikes, because tax hikes hurt individuals and families, and also because they’re unnecessary to provide government’s core services.
Nevada needs Solutions, not more spending on failing government programs.
Thanks for reading and have a great weekend.
Andy Matthews
NPRI President
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