Cut the county sales tax
A committee of the Washoe County School District is getting close to sticking it to the working poor in our county. Their weapon? The sales tax. Again.
Time after time, our state’s affluent dump the job of paying for the state’s needs on those who can least afford it. The planned tax hike is expected to be either a combo property/sales tax hike or, most likely, a sales tax hike. No one is proposing solely a property tax hike.
Nevada was free of a sales tax until the mid-1950s. No one dared propose one because the sales tax is regressive—that is, it hits the working poor harder than the affluent. Workers spend a greater portion of their income on sales taxes than do the wealthy. But under the pounding of the baby boom on the state’s schools, legislators enacted a 2 percent sales tax in large part because then, as now, the wealthy and business would not allow taxes on themselves. Gambling, tobacco and income taxes were beyond the realm of allowable discourse. So teachers’ leaders decided to push for a sales tax, thus screwing their own members, who were poorly paid and would be hard hit.
In 1960, the Nevada Legislature commissioned a report on taxation in Nevada. That report, known as the Zubrow Report, guided state taxation for the next two decades. It called the sales tax regressive and recommended against raising it in the future. It was based, the report said, on what “might be termed the ’sucker theory’ of taxation, and has no place in the formulation of a sound tax program.” The meaning was that the rate of collection of sales taxes is so gradual that members of the public have no idea how heavily they are being taxed.
But time after time the state kept going back to the sales tax well. Screwing the poor was politically easier than tapping the rich who funded campaigns.
In 1981, the Zubrow findings were totally thrown to the winds and the Legislature pushed the sales tax up to a near-doubling of its then-rate. The result is that state finances have been uncertain ever since. The sales tax is unreliable, fluctuating with economic conditions. There have been chronic, and costly, state budget crises ever since 1981.
In 1997, the Legislature authorized a sales tax hike in Washoe and Clark counties. We say “authorized” because the legislators were too cowardly to enact it themselves, so they gave local officials the power to impose the tax. In Clark County, the public was allowed to vote on it and approved the hike. No one expected that to happen in Washoe, where some of the money was intended for the casino-demanded train trench project to lower the railroad tracks at a $250 million-plus cost. So the public was not allowed to vote. Instead, two lame duck county commissioners who had been defeated on the issue of the train trench pushed the sales tax hike through the commission after the election.
Right now, the state sales tax rate is 6.85 percent—eighth highest in the nation. Local portions of that rate have pushed the tax in Washoe County to 7.725. No doubt speaking for the working poor, Chamber of Commerce CEO Len Stevens said from his lofty income, “We can do it [raise the sales tax] at a price everyone can afford.”
Workers in this county need relief from that high rate, not a hike.