San­doval des­per­ate to de­fend tax

Las Vegas Review-Journal - - NEVADA -

GBrian San­doval’s re­cent at­tack on At­tor­ney Gen­eral Adam Lax­alt for Lax­alt’s op­po­si­tion to the com­merce tax was both dis­hon­est and des­per­ate.

In 2015, San­doval pushed through the largest tax in­crease in Ne­vada his­tory, part of which was a new busi­ness tax on gross-re­ceipts called the com­merce tax. San­doval claimed the state needed the tax hikes to fund his new ed­u­ca­tion pro­grams, de­spite vot­ers re­ject­ing a gross-re­ceipts tax by a 4-to-1 mar­gin in the 2014 elec­tion.

At the time, Lax­alt and the ma­jor­ity of statewide elected Repub­li­cans op­posed the com­merce tax. A Lax­alt spokesman con­firms that “as a fis­cal con­ser­va­tive, he con­tin­ues to hold that po­si­tion to­day.”

On Oct. 2, Lax­alt planned to an­nounce his bid for gover­nor. In the early morn­ing hours, an up­dated ver­sion of his web­site went live and in­cluded his sup­port for rolling back the com­merce tax. Be­cause of the Las Ve­gas Strip shoot­ing, Lax­alt can­celed his cam­paign kick-off and changed his web­site to a mes­sage of sup­port for the vic­tims, which still re­mains.

Asked about Lax­alt’s com­merce tax po­si­tion a week later, San­doval claimed that re­peal­ing that tax would take $391 mil­lion out of K-12 ed­u­ca­tion and that the tax “goes straight into ed­u­ca­tion.”

He’s wrong on both counts. Here’s why:

The com­merce tax gives busi­nesses a 50 per­cent tax credit on the mod­i­fied busi­ness tax (also known as the pay­roll tax), which means it nets Ne­vada $195.5 mil­lion. Since Ne­vada bud­gets on a two-year cy­cle, that’s less than $100 mil­lion a year. The Eco­nomic Fo­rum projects that Ne­vada will col­lect more than $4 bil­lion in tax rev­enue in each of the next two years. The com­merce tax, af­ter MBT cred­its, makes up just 2.3 per­cent of that.

The com­merce tax is more than a round­ing er­ror in the bud­get, but not by much.

Con­trary to San­doval’s as­ser­tions, it doesn’t specif­i­cally fund ed­u­ca­tion pro­grams. The com­merce tax goes into the gen­eral fund. It’s the eighth-largest tax source, af­ter ac­count­ing for MBT cred­its.

San­doval then de­manded that Lax­alt de­tail what he planned to cut if he suc­ceeded in re­peal­ing the tax.

That’s a fair ques­tion — and one that’s easy to an­swer given how small the tax is — once Lax­alt an­nounces.

But San­doval looks fran­tic and class­less in at­tack­ing now. That’s be­cause Lax­alt’s de­layed his po­lit­i­cal am­bi­tions to fo­cus on help­ing shoot­ing vic­tims. Lax­alt’s not talk­ing pol­icy, why is San­doval?

San­doval’s spent the last seven years dodg­ing hy­po­thet­i­cal ques­tions. How hard is it to say, “I’ll be happy to talk about the mer­its of the com­merce tax once Adam an­nounces?”

Sen­ate Democrats jumped into the fray as well, prais­ing the com­merce tax as a “bi­par­ti­san com­pro­mise.” Com­pro­mise only works one way, ap­par­ently. Democrats spent the last ses­sion try­ing un­suc­cess­fully to re­peal bi­par­ti­san la­bor re­forms and suc­cess­fully deny­ing fund­ing for ed­u­ca­tion sav­ings ac­counts. Those were both el­e­ments of the com­pro­mise they now want to claim is sacro­sanct.

San­doval’s need to use de­cep­tion in defending the com­merce tax shows how right Lax­alt is to want to re­peal it.

Vic­tor Joecks’ col­umn ap­pears in the Ne­vada sec­tion each Sun­day, Wed­nes­day and Fri­day. Lis­ten to him dis­cuss his col­umns each Mon­day at 9 a.m. with Kevin Wall on 790

Talk Now. Con­tact him at vjoecks@ re­viewjour­ or 702-383-4698. Fol­low @vic­tor­joecks on Twit­ter.

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