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May 5, 2015

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Nevada Territory

Nevada tax could face same constitutional hurdle as Perry’s Texas tax

As Nevada businesses and labor try to form a coalition to advocate a broad-based business tax, there's another potential wrinkle - the Nevada Constitution.

Nevada Democrats based the "margins tax" they unsuccessfully proposed during the 2011 session on a Texas tax, passed in 2006 with the support of Gov. Rick Perry. Gaming, labor and other interests are looking at putting the tax in front of voters in 2012.

With Perry announcing his bid for the Republican presidential nomination on Thursday, expect supporters of the Nevada tax to use the Texas governor to dampen conservative opposition.

But as attorney Josh Hicks notes on his blog "Of Note Nevada", the Texas tax is being challenged as unconstitutional, and a Nevada version could face the same legal scrutiny. Texas, like Nevada, prohibits a personal income tax in its constitution.

Hicks, former Gov. Jim Gibbons' chief of staff and former general counsel to the governor, said a Texas company challenged the margins tax "because it is (1) a thinly disguised income tax and (2) the individual income of each partner is their share of partnership profits which is being taxed."

Nevada also has a prohibition on an income tax on individuals, although it specifically allows a tax on businesses.

Article 10 of the Nevada Constitution reads like this:

"No income tax shall be levied upon the wages or personal income of natural persons. Notwithstanding the foregoing provision, and except as otherwise provided in subsection 1 of this Section, taxes may be levied upon the income or revenue of any business in whatever form it may be conducted for profit in the State."

But with the U.S. Supreme Court ruling corporations have similar rights to political free speech as individuals, bet money that the anti-taxers would challenge anything that smells like a corporate income tax using a similar argument.

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  1. Texas has some of the highest property taxes, high sales tax and also one of the highest rates of poverty and welfare in the U.S.

    I would not be looking at Texas as an example on how to do business.

  2. Article 10 is very clear in using the words: "natural persons" to define those upon whom an income tax may not be levied. Corporations are NOT "natural persons".

    Furthermore, Corporations may average their income and get tax credit for years of loss. The last time that was allowed for natural persons was over 30 years ago when the tax code was changed by Reagan.

    If businesses may argue for a rule change and declare themselves closer to 'natural persons' to protect against income taxes, natural persons should demand the same tax shelters and deductions as corporations...and religions.

    Religions, and owners of religions are the biggest tax abusers in America, bar none. They run profitable business ventures and corporations that make Billions, travel the world, spend all day preaching, pontificating, and yacking, and don't pay the American People a licking penny for the privilege.

    People of the same ethical Conviction who don't waste their time dreaming up constructions of heaven are not allowed the same tax privileges because Religions lobby for themselves and no one else.

    The push on now is to have the taxpayer fund religious schools - so that the owners can have more money to travel the world, preach and yack tax free. The American Taxpayer should get the same tax privileges as corporations and those in religion to level the playing field.

  3. And about Debt Clocks, here's home for the U.S. National Debt Clock Organization:

    Click on State Debt Clocks and pick your State.

    About Texas, here are the Texas financial statistics:

    Population: 25.4 million
    Food Stamp Recipients:4.05 million or 18% of the population

    Yearly Revenue: $145 billion
    Yearly Spending: $185 billion
    Yearly Deficit: about $40 billion

    GDP: $1.14 Trillion
    Total State Debt: $216 billion
    Debt per Citizen: $8,350 each
    Debt to GDP: 18.6%

    Texas is in deep financial trouble, but unlike Nevada, they have an oil & gas industry that can rip the rest of the nation off and keep more people working.

    There is no secret to the success of Texas:
    1. Oil & Gas to bring in great wealth.
    2. Excessive Government spending to minimize length of the soup lines.
    3. Refusal to hire anyone working for the Nevada Development Authority.
    4. A great cattle industry with no lack of bull.

  4. "Corporations are NOT "natural persons"."

    Not according to Mitt Romney; he said "corporations are people".

  5. "There is no secret to the success of Texas:
    1. Oil & Gas to bring in great wealth"

    I heard yesterday that is why the unemployment rate is so low in Texas - the oil industry. So it seems we have a potential President of the U.S. tied to big oil....again.

  6. From what I've seen from most politicians, an IQ test should be mandatory prior to running for office. So at least when they are lying they would be smart enough to know they are lying. They say things then deny they said them when every word is captured on video.

    They are nothing but Representatives for the Wealthy from Banks, Wall-Street, Multi-National Corporations, Hedge Funds, Foreign Businesses(U.S. Chamber of Commerce) and anyone else willing to give them major campaign money.

    Unfortunately many Americans vote based on who has the nastiest 30 second TV Ad, instead of learning the real facts. Until there is Financial Disarmament of the politicians constant requiremnet for money to run campaign ads, I see no change possible.

    The Wealthy have succeeded in gridlocking the U.S. Government, leaving them free to plunder the treasury.

  7. @chuck333....why would we drill for oil here in Nevada when there isn't any? Oil companies are not stupid and they don't drill where they won't find anything. Also, drilling everywhere will not help when the US only has 3% of the world's oil reserves and we consume 25% of the world's oil every day.

  8. Unfortunately, due to a tiny corrupt 5 "person" ( I use that term VERY loosely) majority on the Supreme Court, corporations now have all the rights of corporations AND all the rights of people, but without any of the limitations. Corporations enjoy huge tax benefits not available to natural people, are effectively immortal, and are psychopathic by any psychological definition.