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Ralston vs. NRPI: Round 7

Jon Ralston and the fiscal conservatives over at the Nevada Policy Research Institute (NRPR) are having a spirited Twitter exchange over taxes today.

First Ralston tweeted that NPRI “still hates taxes (though proposed services tax).”

NPRI responded that their services tax proposal was “revenue-neutral.”

To which Jon responded, “My friends at @NevadaPolicyRI have a great sense of humor. Propose NEW services tax on biz, call it ‘revenue-neutral tax reform.’ #orwellian.”

Actually, NRPI is correct.

The tax reform proposal they suggested would expand the sales tax to include certain services, such as haircuts, dry cleaning, etc. However, it would simultaneously reduce the current sales tax on goods. The net result would be no additional revenue going to the government, which is the whole point.

In addition, a new tax on services would NOT be a tax on the businesses themselves, but a tax on the consumers who pay for those services.

We don’t support a new services tax; however, a revenue-neutral tax reform proposal to tax some services while reducing the sales tax on goods which doesn’t result in the government getting more tax revenue is not a tax hike. The amount of taxes going to the government remains the same.

If liberals were smart, they’d take that deal this session; knowing that once the economy improves the government will automatically begin getting more revenue from the boost in sales of goods AND services.

Alas, liberals aren‘t really interested in broadening the tax base to make it more “stable.” They only want more money to continue growing the government, even in the middle of the Great Recession. Republicans in the Legislature should call the Democrats’ bluff.

Alas, Republicans are no smarter than the Democrats on this issue.