Tax opponents knowingly using erroneous facts
More than a month after they were told it was flawed, anti-tax activists are still using a fact sheet containing several errors to convince voters to sign their tax repeal petition.
George Harris of Liberty Caucus, heads the group asking voters to repeal the tax law passed by the 2003 Legislature. Senate Bill 8 was designed to raise $837 million over the next two years to balance the state budget.
He acknowledged last week there are errors in the sheet. Harris said Nevadans for Sound Government is now having petition collectors use the Legislative Counsel Bureau’s analysis of the tax package but admitted many are still using the flawed “Fact Sheet.”
“Yes there are fact sheets out there,” he said. “I can’t get them back.”
The sheet is titled “10 reasons why you should sign the referendum to repeal the $837 million tax increase.”
Among them: “With the recent tax increase, an additional 80 cents per pack (of cigarettes) now goes to the government.”
The state Taxation Department and the Legislative Counsel Bureau say the tax package increased cigarette taxes 45 cents a pack – to a total of 80 cents. The remaining 35 cents is the existing tax in effect since 1989.
Also on the fact sheet: “With the recent tax increase, an additional 72 cents of a fifth (of hard liquor) now goes to the government.”
The tax package added 31 cents to the tax on a fifth, doubling the levy in effect since 1983.
Harris was first informed the “Fact Sheet” was wrong in some places and misleading in others when he and Janine Hansen of the Independent American Party filed the petition with the Secretary of State’s office on Oct. 30. Both said at that time they would check the numbers and correct any errors. But as of Tuesday, the “Fact Sheet” was still on the group’s Web site and still being quoted by repeal supporters.
“It’s a topic for discussion at next Thursday’s meeting,” said Harris when asked last week why the errors haven’t been fixed.
He said part of the delay was caused by his bout with the flu over the past two weeks.
“Beat us up. I’m fine with it,” he said. “We’re not egregiously off on the numbers.”
The sheet also says “$1,020 will now go to the government for selling a $199,000 home.” and that employers will pay $280 in payroll taxes for employees making $40,000 a year.
While technically correct, those claims imply taxes will increase that much, which is incorrect.
All Nevada counties have collected 65-cents per $500 on real estate transactions since 1967. According to Nevada Taxpayers Association, 10 cents goes toward low-income housing projects, the rest to local government. On a $199,000 home, the tax totals $259. Only Clark County collects more – an additional 60 cents for schools worth another $239 in taxes.
The actual increase imposed by the 2003 tax package is $517, which brings the total to $1,020 in Clark County.
Everywhere else in Nevada, the total tax would be $776.
Likewise, a large share of the per-employee tax already exists. Businessmen have paid $100 a year per worker since 1991. For a worker making $40,000 a year, the new tax would be $280 – an increase of $180.
But the average Nevada worker doesn’t make $40,000. State labor statistics say the average wage – counting everyone from the Mirage CEO to fast food workers – is $32,800. Applying the 0.65 percent tax to that wage, the average tax per worker will be $213 – about double the business license tax, but almost $70 less than the $280 number.
And the impact depends on the business involved because, unlike the business license tax, the new tax is a percentage of payroll. Businesses paying workers less than $7.40 an hour will actually pay less than they do now.
Harris said the “Fact Sheet” was “based on the information we could acquire at the time from the government.” State and legislative officials deny any part in developing the sheet.
“The fact is the whole number is right,” Harris said.
That statement too is flawed because the referendum won’t repeal $837 million in taxes as the “Fact Sheet” says. As worded, the referendum would repeal all of SB8 – which would restore the $144.7 million raised by the old tax.
In addition, the referendum does nothing to the $44.1 million in added Secretary of State fees or the $30.7 million in tax collection discounts which were in SB2 and AB4, not SB8.
When those amounts are deducted from the total, the referendum would actually roll back taxes $617.2 million, not $836.7 million.
Contact Geoff Dornan at email@example.com or at 687-8750.