Watch the magic happen: NPRI responds to Ralston

Victor Joecks

Yesterday, liberal political pundit Jon Ralston wrote a column attempting to smear the Nevada Policy Research Institute and suggest that NPRI has an internal philosophical disagreement.

For regular readers of this blog, Ralston’s ad hominem attacks didn’t come as a surprise, because last Friday we predicted that Ralston would write a “doozy” of a column distorting NPRI’s positions in an attempt to avoid answering a simple question.

For further background, Ralston’s column came in response to my post titled “Ralston calls for a magic tax increase.”

Anyway, Ralston’s column has led NPRI to send this letter to the editor of the Las Vegas Sun. We’ve just sent it in, and we’ll see if the Sun runs it.

Dear Editor:

It’s ironic that in his Nov. 21 column, Jon Ralston both bemoans the lack of real debate about Nevada’s tax structure and then proceeds to use ad hominem attacks to try to discredit the work of the Nevada Policy Research Institute.

While Mr. Ralston offers praise for the revenue-neutral tax reforms proposed in NPRI’s “One Sound State, Once Again” report, which is designed to, among other objectives, reduce volatility in the Silver State’s tax structure, he is apparently upset that NPRI asked him for clarification about his own idea for a new state business tax.

In a previous column, Mr. Ralston had referred to “a tax increase (some form of new business levy that would not crush folks in this economy).” NPRI contacted Mr. Ralston, asking, “What type of tax are you referring to?” Despite his expressed concern for honest debate, Mr. Ralston has yet to answer this very simple and legitimate question. Instead, in his e-mail response, he dismissed NPRI’s inquiry as “nonsense” and then, in his Nov. 21 column, sought to argue that discord exists among NPRI’s statements.

No such discord exists.

NPRI has consistently maintained that all forms of taxation introduce distortions into economic decision-making and curb long-run economic growth. We recognize that governments are nonetheless compelled to levy taxes in order to finance their operations.

Yet, some tax instruments are inherently more destructive than others and so the choice of tax instrument matters greatly. In our “One Sound State, Once Again” proposal, we evaluate each tax instrument within the objectives of reducing volatility, minimizing tax-induced distortions and compliance costs, and ensuring tax equity.

However, that proposal also calls for limits on state spending and develops the explicit goal of minimizing “the necessarily perverse impact on economic behavior that taxes impose [by] limiting the overall tax burden.”

Apparently attempting to distract from his unwillingness – or inability – to identify the benign “new business levy” to which he had referred, Mr. Ralston posits some logical inconsistency between NPRI’s calls for tax reform and its recognition of the destructive impact of taxes. Again, no such inconsistency exists.

While the primary purpose of the “One Sound State” proposal is to ensure economic efficiency while protecting taxpayers, NPRI recognizes that even the taxes imposed under this proposal – like all taxes – will have “negative consequences.” What’s unique about “One Sound State” is that it is designed explicitly to minimize those consequences.

Mr. Ralston says “thoughtful discussion,” rather than “ideological hackery,” is needed regarding the state budget. Yet, while NPRI has consistently offered “thoughtful discussion” on both the tax and spending sides of the equation, Mr. Ralston himself resorted to ad hominem attacks on NPRI staff.

This is not the “thoughtful discussion” we would have anticipated.

Geoffrey Lawrence and Victor Joecks
Nevada Policy Research Institute

Also, here is the e-mail I originally sent to Ralston asking him what type of tax increase he was referring to, and his reply that didn’t even attempt to answer my question.