Tax Increases - Taking The Wrong Approach

By:  Doug Busselman, Executive Vice President

As Governor Jim Gibbons sets the agenda for the February 23rd Special Session the likely directives will limit the scope of the decisions for the legislators to make staying within the boundaries of cutting spending.   Such an agenda would keep the idea of tax increases out of the mix.

Over the past several weeks there have been no shortages of advocates advancing their causes financed by digging deeper into the wallets of the private sector.  “Just a little more won’t hurt” they implore.  “Our spending requirements are simply too important to not have the funds the 2009 Legislature authorized.”

Getting past the nearly $900 Million shortfall for the current two-year budget cycle will bring us to the 2011 Legislative Session.  Only the possible gains of non-majority party legislators in the 2010 Election will provide for a possible discussion and compromise in the tax hikes Democrats believe so strongly in forcing on us.  Voter actions which achieve a positive number of non-Democrats that prevents the party from having a two-thirds majority will provide relevant policy deliberations that can shape Nevada spending and tax policies which reflect the importance of limitations for both sides of the equation.

Taxes are thought to be essential government action carried out in order to pay the costs of government services.  

This should only be the case to the extent that government services are justifiably established to be appropriate for government to be doing with funding levels which reflect the minimum amounts to carry out defined purposes.  Approaching the process with a budget system operating on a complete construction from zero (as opposed to simply adding percentage increases to prior levels) would also be a significant improvement.

It would be helpful to be certain that our legislators recognize that the private sector is the source where prosperity originates and understand that taxes diminish the ability of the private sector to be successful.  This redirection, from the legislative leaders’ current mindset of bureaucrats and the spending wishes of government overriding the private sector, will likely only be accomplished through the attitude adjustment made through the November election.

Tax increases of current tax types and expansion of tax burdens into new areas must not be ends to themselves.  The idea is misdirected that our state’s tax system can only be judged to be properly structured when legislators are not hampered in spending as much as they wish and will only be corrected by voters sending a clear signal to this effect.

 

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