Recently, my friend Slats Grobnik told me about politics in a state where he had lived.
“We had a Republican governor who won his first term by promising things limited-government conservatives wanted, especially no new or increased taxes. In that term he abandoned all those promises and took up with the Dems and RINOs – that’s Republicans in Name Only.
“The Dems couldn’t muster a serious candidate against his reelection. Just some guy who lost to None of The Above in his own primary but beat seven other nobodies. It was a GOP year, and the incumbent got 71% of the vote. The left-wingnut columnists, lamestream media and political pontificators at the universities swooned. But twelve years earlier the same thing happened to another Rep gov and he got 72% against a name-brand Dem, so I thought it was no big deal.
“For reelection, the guy said nothing at all during his campaign – certainly nothing about taxes. He got megabucks from the major industry in the state and the other crony special interests and spent it on pretty pictures and empty feel-good rhetoric. It was an election classic – exactly like the Rep gov twelve years earlier.”
“Sounds strange,’ I said.
“Yeah,” continued Slats. “Here’s some more parallels. The Industry, which dominated our state more than any industry dominates any other state, employed a bunch of fat cat lobbyists and political consultants -- the Political Thugs, we called ‘em. They doled out money not only to the gov, but also to other offices, legislative leadership and pliable members on both sides of the aisle in both houses. Besides money, the Thugs also provided political strategic and campaign services to many folks and acted as speechwriters and fixers for them.
“Just the way it was twelve years earlier. In fact, most of the Thugs played the same roles then, too, except the one who got sent to a country club prison in the meantime. In short, the Industry and the Thugs owned many pols big and small. And they had the same goal as a dozen years earlier, which they kept secret throughout the reelection campaign: to pass a gross receipts tax. See, a GRT didn’t apply to their main business, but could milk everyone else dry.
“The Industry had a long-standing deal with the Dems and RINOs. It would fund their elections and support all their statist lib spending programs and the rest of their agenda. Provided only one thing: that those Establishment folks would never put the tax bill for all that stuff on the Industry by increasing its special tax. Instead, everyone would leave The Industry alone with the lowest tax of its kind in the world. It was a sweet deal for everybody. Passing a GRT for new taxes was the lynch pin in the whole scheme, because it applied to everyone else, but not to The Industry’s main business.
“Twelve years earlier, they tried and failed to pass a GRT. There were just enough conservatives to stop the GRT then, and the establishment had to settle for a bunch of other stuff for the biggest tax increase in state history at that time. This time, they had some new tricks. They had a special rate for each industry and type business.”
“Why?” I asked.
“It was sheer genius. With this version, the Thugs, the Industry and their pols could in the future target anyone who gave them any trouble or stood in the way of their political agendas with higher rates. And reward businesses who toed their line. It also meant new lobbying and political consulting clients and dollars for the Thugs, because all those businesses would have to hire them for protection in future sessions.
“One more thing: In twelve years, the Industry had diversified. So, a larger fraction of its business would now be hit by a GRT. By tailoring the rates to each industry, they could make sure taxes on their operations are kept low.
“They also learned from their previous mistakes. This time, instead of insisting on big bucks from the first implementation of the GRT, they ‘compromised’ and went for a modest amount. That way they could con the wavering Reps in the middle into believing voters wouldn’t punish them for supporting a ‘modest’ GRT. Camel’s nose under the tent, humps to follow later. Biggest tax increase ever. Worked like a charm.
“So, for the next 20 years, by messing with the GRT rate, they’ve got not only a continuing tax-hike bonanza for everything they want to do, but also a political consultants and lobbyists’ full-employment act.”
“Wow!” I replied. “It would awful if anything like that ever happened here.”
Ron Knecht is Nevada State Controller.