Galt's Gulch No More - Nevada Policy

The only gulch that people typically associate with Las Vegas is Glitter Gulch—that stretch of what was once Fremont Street (now a pedestrian mall) from Las Vegas Boulevard to Main Street.

But for many who have read Ayn Rand’s Atlas Shrugged, Nevada—and Las Vegas in particular—have been the closest thing to Galt’s Gulch still remaining in the United States. As one friend told me, when he needed to relocate somewhere with economic opportunity, he decided to move to Las Vegas, “because it’s the closest thing to Galt’s Gulch that there is.”

Atlas Shrugged, after the Bible, is the “second most influential book for Americans today” according to a joint survey conducted by the Library of Congress and The Book of the Month Club. The book tells how the world’s great entrepreneurs, inventors and capitalists go on strike because government regulations are strangling the very life, economic and otherwise, out of the country. As a decaying society demands the sacrifice of the best for the sake of the worst, Rand’s heroes—men and women of the mind—rebel, and show that the free human mind, not guilt, is the driving force of civilization.

In Atlas, Galt’s Gulch is the place where these men and women go, to live, work and create, unfettered by government looters. Everyone lives in peace and harmony, free to achieve their goals, get as rich as possible, and explore the highest human potential. There is no state to take from one person to redistribute to another. As the inscription above the door to John Galt’s powerhouse read, “I swear by my life and my love of it I will never live for the sake of another man, nor ask another man to live for mine.”

Until now, Nevada has been such an oasis for businesses and working people relocating from other parts of the country ravaged by government regulations and excessive taxation. No wonder 6,000 people per month move to Las Vegas looking for a better life.

While the rest of the country has been mired in a job-gutting recession, Las Vegas and Nevada clip along. The reason: Nevada’s pro-business climate with its lower tax burden. As businesses are created and expand, jobs are created for working people. It’s an arrangement infinitely superior to the government-handout schemes—schemes that suck the life and dignity from those who participate—that the political class always pushes.

Now Governor Kenny Guinn proposes to destroy the Nevada economy that has added so much to every Nevadan’s happiness. Dozens of tax-increase plans are appearing, with nary a single plan proposed to cut government. The tax hogs are rooting all around the barnyard for looting satisfaction: increases in cigarette, liquor, property, amusements, services, business licenses, unemployment, room and gaming taxes are all on the table. And of course the specter of a gross receipts tax—with a new Nevada IRS to collect it—still looms.

Cutting the state’s budget isn’t even being considered, and now various business groups are capitulating, hurriedly scrambling to deflect any tax increase onto some other industry—like Big Gaming has done from the beginning. The Nevada Bankers Association has come out saying that the banks “are willing to pay their fair share.”

Kevin Higgins, president of the local chapter of the National Association of Industrial and Office Properties (NAIOP) recently told the Las Vegas Review-Journal, “The governor was right in saying everyone should pay their fair share.”

But no matter what way the government gets the money or from whom, taxes make everyone poorer. Bankers and developers may think they’ll be better off if they pay a little and someone else pays more. But taxation hampers the entire economy. In an essay entitled “The Inverted Moral Priorities,” Ms. Rand once wrote, of a young woman: “No one tells her that higher taxes imposed on the rich (and semi-rich) will not come out of their consumption expenditures, but out of their investment capital (i.e., their savings); that such taxes will mean less investment, i.e., less production, fewer jobs, higher prices for scarcer goods; and that by the time the rich have to lower their standard of living, hers will be gone, along with her savings and her husband’s job—and no power in the world (no economic power) will be able to revive the dead industries (there will be no such power left).”

No matter what the chosen vehicle, if taxes are increased, Nevada Galt’s Gulch will soon be but a fond memory.

Doug French, executive vice president with a Southern Nevada bank, is a policy fellow with the Nevada Policy Research Institute.