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Close the Tax-Hike Loophole

In the winter of 2008, the teachers union put a gun to gaming’s head and demanded that they do something to pump more money into teachers’ pockets “voluntarily” or they would gather the signatures needed to put a gaming tax hike on the ballot. Three gaming companies blinked and gave in to the extortion. Thus, we now have a 3 percent hike in the room tax.

The threat worked for one reason: Because opinion polls were showing that the a sufficient majority of the voting public would support a gaming tax hike. But if tax hike ballot initiatives were required to get the same 2/3 super-majority vote to pass as is presently required to pass a tax hike in the Legislature, it’s far less likely such tax hike would fly, thereby diminishing the threat to businesses by labor unions and other special interests that feed at the public trough.

Recognizing this, an effort was made to place a constitutional amendment on the ballot last year which would have required a 2/3 super-majority vote of the people to approve future tax hikes appearing on the ballot. Alas, the state Supreme Court issued a ruling last year kicking the initiative off the ballot over a technicality – even though over 100,000 Nevada voters legitimately signed the petition. The people, as usual, got screwed by government protecting its own.

In an effort to keep the issue alive, conservative Assemblyman Ed Goedhart (R-Amargosa Valley) submitted the exact language of the initiative as a bill this legislative session. Unfortunately, the Democrats who run the Assembly refused to even hold a hearing on the bill, let alone a vote.

So why is this “old news” so important now?

Big Labor didn’t get what it wanted this session – primarily a business income tax – despite helping to elect Democrat majorities in both houses of the Legislature. And they’re hopping mad about it. So Danny Thompson of the AFL-CIO issued a threat this week. He said he’s considering a ballot initiative in 2010 to impose a new broad-based business tax. Which will put the business community in general exactly where the gaming industry was a year ago. And you can bet some businesses and industries will sell out and end up supporting the tax hike proposal as long as it doesn’t hurt their industry too badly.

See: Gaming. Then see: Mining. Then see: Trucking. Then see: Chamber of Commerce. Then see….

Anyway, it should now be clear even to the blind….er, I mean the visually challenged….that Big Labor will continue to use the ballot initiative loophole in the state’s tax restraint law to hammer businesses with higher taxes to feed government.

And don’t think that if you’re not a business this doesn’t concern you. If they can successfully raise taxes by ballot initiative on businesses, they can raise taxes on your dry cleaning and haircuts by ballot initiative, too.

Which is why moving forward once again with a signature drive to extend the 2/3 super-majority requirement to ballot initiatives should be a top priority for fiscal conservative in 2010.

That….and defeating RINOs in Republican primaries.