Consideration, not condescension, needed in talk about business tax

By Jon Ralston

Sunday, Nov. 21, 2010 | 2:01 a.m.

The main problem with having a debate over Nevada’s tax structure and spending patterns is that it quickly devolves into pabulum.

No new taxes.

Make mining and gaming pay more.

The unions are the problem.

Money will solve all education problems.

Politicians will be politicians, and special interests will be special interests. But in my biennial hope that a real debate will occur over these seminal issues, especially as the Gang of 63 and a new governor confront a financial cataclysm, I never expected open-mindedness from the Nevada Policy Research Institute.

Funded by conservatives and with a patronizing attitude toward everyone not in the Smug Tank, NPRI often has eschewed policy and analysis for snarky sneering. But then, in June, came this often-thoughtful dissertation from NPRI’s Geoff Lawrence, which contained an array of provocative proposals, including, shockingly, a plan to expand the sales tax base (with a concomitant drop in the overall rate to make it revenue-neutral): http://tinyurl.com/2chx5af.

It seemed like a good jumping-off point, especially because private talks among business folks had begun that were bandying about a sales tax on services. But on the eve of what promises to be an excruciatingly difficult legislative session, with no sign of an elevated dialogue from Gov. No New Taxes II and a collectively mum Gang of 63, NPRI has reverted to form and become the Nevada Policy Rationalization Institute.

To explain, I relate a recent to and fro with one Victor Joecks, who is NPRI’s deputy communications director. Joecks is quite the jokester, as this story will show you, revealing that his group takes the upcoming debate with little seriousness.

Joecks sent me an e-mail last week expressing faux puzzlement with this line from my Wednesday column: “I believe the key to any revenue package — which probably would have to include a tax decrease (repealing the payroll tax?) with a tax increase (some form of new business levy that would not crush folks in this economy) — is providing political cover for those potential GOP votes.”

Joecks asked: “A new business tax without negative consequences? What type of tax are you referring to?”

My response revealed my distaste for his condescending tripe: “So all business taxes have ‘negative consequences’? And I thought you were a think tank, not a political sloganeering tank. Please don’t send me nonsense like this anymore.”

Next thing I know, Joecks posted a blog headlined, “Ralston calls for a magic tax increase.”

Clever, ain’t he?

And this: “Now why didn’t NPRI — or anyone else — think of that? It’s magic! Budget problems averted!”

Hey, isn’t there a Strip venue that needs a new headliner? This guy is hilarious. (Full post here: http://tinyurl.com/28muhmo.)

Forget for a moment that many independent analysts — and some business folks — agree with me that repealing the idiotic payroll tax, a product of the horrific tax package of 2003, and imposing some kind of business tax might be a reasonable solution.

What astonishes me — although, perhaps, it shouldn’t — about Joecks’ attitude is not his haughtiness or nastiness — I get that all the time (and sometimes am guilty of it myself). It’s the hypocrisy.

In case you have forgotten, NPRI proposed a brand new tax in Lawrence’s proposal. Expanding the sales tax base means new taxes that could cause businesses to raise their prices and could have — what was Joecks’ brilliant construction? — “negative consequences.”

In his June proposal, Lawrence recognizes what every other tax study has concluded, which is that broadening the sales tax base could reduce revenue volatility, minimize economic distortions, minimize compliance costs and ensure tax equity — four pillars of reform that he cites, as have others.

And yet when I suggest a new business tax, Joecks has a conniption? Maybe the right-hand doesn’t know what the far-right hand is doing over at NPRI.

I truly was hoping the think tank could be part of the solution, not part of an all-too familiar problem: Reducing what should be a thoughtful discussion, with room for good ideas on both sides, to ideological hackery. As I have said for years, this is not just about money — Democrats must accept long-overdue reforms — but it is, to a great extent, about money.

There is not a lot of latitude for debate about the tax structure itself — all of those tax studies and a newer one by the Reno Gazette-Journal and UNR arrive at the same conclusion. But the serious debate, which Gov.-elect Brian Sandoval and the Gang of 63 must engage in, is what level of funding for various areas should be imposed on any new structure.

That’s a colloquy many have been longing to hear. NPRI should decide whether it wants to participate or just throw rocks.