Big government alligator eyes gaming
November 22, 2007
Recently MGM chief Terry Lanni delivered remarks to the Nevada Development Authority concerning the “chaos” of the state’s economy. It’s quite understandable why Mr. Lanni took time to address this important public policy issue; after all, there are at least two ballot initiatives being readied to sock the gaming industry with a huge new tax hike. But in many ways, gaming has only itself to blame.
The industry has been appeasing the Big Government crowd for decades now by supporting one tax hike after another, as Mr. Lanni himself acknowledged in his remarks. Indeed, Mr. Lanni proudly rattled off multiple tax hikes the industry has supported over the past 20 years: A 1986 hike in estate taxes; a 1987 gaming tax hike; a 1991 sales tax hike and a new employee head tax; a 1993 sales tax hike; a 1993 room tax hike; a 1996 property tax hike; a 1997 sales tax hike; a 1997 room tax hike; a 2002 tax hike on developers, aviation fuel and retail sales; a 2004 sales tax hike. And in 2003 – four short years ago and the year of the mother or all tax hikes in Nevada – Mr. Lanni noted that “gaming supported several potential taxes,” including a gross receipts tax.
As Winston Churchill famously noted, “An appeaser is a guy who throws his friends to the alligator in hopes that the alligator will eat him last.” Well, the Big Government alligator just belched and is now eying gaming for dessert.
It’s not easy for fiscal conservatives to feel sympathy for the predicament gaming finds itself in these days, especially when it misrepresents who ultimately shoulders the tax burden. For example, Mr. Lanni asserted in his speech that “the largest components of the 2003 tax package were paid solely or primarily by the gaming industry: the live entertainment tax, the alcohol tax and cigarette tax.” Not.
One of the biggest myths in the tax debate is that businesses pay taxes. They don’t. Businesses collect taxes and/or pass taxes along to customers in the form of higher prices. Indeed, I went to a show in Las Vegas recently and paid the entertainment tax out of my own pocket. Gaming didn’t pay that tax; I did.
By no means am I saying I support a tax hike on gaming. Far from it.
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By the same token, gaming has to stop appeasing the Big Government alligators. Rather than supporting tax hikes, let’s see gaming devote its considerable influence to fostering a discussion on exactly what Nevada’s basic, essential and legitimate government needs are – and then get rid of the rest. To that end, the industry should first push for full transparency in the budget; requiring the government at all levels to post every expenditure it makes on a public Web site for the people to see and evaluate. Gaming should also support and fund a comprehensive Nevada version of Ronald Reagan’s “Grace Commission” to root out waste, fraud and duplication of services in the existing state budget.
As Mr. Lanni himself noted, we’ve been raising taxes non-stop for the last 20 years. It’s time to try something else.
• Chuck Muth, of Carson City, is president and CEO of Citizen Outreach and a political blogger. Read his views Fridays on the Appeal Opinion page or visit http://www.muthstruths.com
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