Wednesday, May 21, 2003 | 8:42 a.m.
The issue of business taxes has been argued for quite a while. The political solution of a very complicated and unfair gross receipts tax is the only tax proposed. There is a sounder, simpler, fairer and more shared tax that is available, and that is a tax based on the federal (national) income tax paid by the corporations.
Corporations fall into one of three categories. They are in this state only, in the United States only, or are multinational. For illustrative purposes, the basic tax would be 10 percent of the federal (national) tax.
Now, for those companies with operations only in Nevada, there is nothing else to do. Fill out the federal forms; write a check to Nevada for 10 percent of the federal tax.
For companies that operate in more than one state, the calculation is slightly more complicated. Divide Nevada revenues by total revenues. Pay that percentage of 10 percent of the federal tax.
For multinational companies the calculation is more complicated. Add all taxes paid to all national jurisdictions. Divide Nevada revenues by total revenues. Pay that percentage of 10 percent of total national taxes.
I am not sure what the tax rate should be. Ten percent might be high or might be low. But I am sure that this method is simple for almost all companies and is fair. The only problem with it is that it does not leave room for the politicians to gain favor with their large contributors.
That is unlucky, and ensures that a harebrained, politically oriented gross receipts tax will be imposed on us.
FRANKLIN P. SILVER
archive
