Tuesday, February 9, 2010

The State of Our State? Not So Good, No Thanks to Gibbons & His Extreme Right Politics

Oh, joy. He's back to cause more damage and destroy this state. Why is it that it seems like no one is doing anything to stop him?

We all know that "Luv-Guv Gibbons" doesn't give a sh*t about our state. This is all just a grand political game for him. It's his last chance to win the GOP nomination for reelection.

He cares nothing about slashing the social safety net to shreds, denying people badly needed health care, destroying what's left of our education system once and for all, and all around reducing our state to the equivalent of a small, underdeveloped third-world country.

And for what? For a failed far right ideology? For a failed Republican campaign slogan? Desert Beacon gives us a reality check:

If "lower taxes" were the fulcrum on which to lift an economy out of a recession, then Nevada ought to be booming. The state has the second lowest tax level in the nation: "Nevada's state and local tax burden has consistently ranked among the nation's lowest. Currently estimated at 6.6% of income, Nevada's state/local tax burden percentage ranks 49th highest nationally, well below the national average of 9.7%. Nevadans pay $3,245 per capita in state and local taxes." [Tax Foundation] (emphasis added)

A popular notion among supply-siders is that the lower the overall tax liability, the higher the level of business investment, and therefore, the higher the levels of employment. The rich, it is said, if not deprived of their wealth by taxation, will invest it in enterprises which in turn will drive employment upward. Nice theory. The fact is that Nevada, with its next to last in the nation tax assessment level, has a 13% unemployment rate. [DETR/BLS] Only Michigan with a 14.6% unemployment report is currently higher.

The Tax Foundation gave Nevada a nice high score (4th) in the nation in its rankings of State Business Tax Climate. [TTF] If the direct correlation between employment growth and business tax liabilities holds then we should see states with the "best" business tax climates also having the lowest rates of unemployment. If we were to cherry pick some numbers from the "top five" low business tax states we could extrapolate just such a conclusion. South Dakota, with the "best" business tax climate has a 4.7% unemployment rate; second place Wyoming has a 7.5% unemployment rate. Third place Arkansas has an 8.8% unemployment rate, and fifth place Florida has an unemployment rate of 11.8%. When two out of five states with low taxation rates (Nevada/Florida) have higher than average unemployment rates the correlation can't be made, and there's certainly no support for a causal relationship. Nor, can we compare the economies of South Dakota and Wyoming, based on primary industries, with Nevada and Florida, which both have significant tertiary industry economic components.

Suppose we tried it the other way around, and posited that higher taxes led to higher levels of unemployment. We'd have to cherry pick those numbers too in order to suggest a correlation. New Jersey, which ranks 50th in business tax climate has a 10.1% unemployment rate. 49th ranked New York has a 9.0% unemployment rate; and, 48th ranked California has a 12.4% unemployment rate. Not to put too fine a point to it, but all of these states, all ranked well below Nevada's rating for "supportive business tax climate," all have lower rates of unemployment. If unemployment rankings and business tax climate figures don't correlate, then perhaps we could explore other comparisons.

So if "no new taxes" is working so well for us in Nevada, why is our economy so much lousier than states like New York with higher taxes and a stronger regulatory climate? Could it be that we haven't been investing in our infrastructure like we should? That we should be strengthening our infrastructure to invest in a stronger, more diversified economy? Take it away, Maven & Meddler.

If we are going to model the state after families, then I gotta tell you that although this family - here at Rancho Maven - has cut back on some non-essentials, we haven’t quit investing in our future. We continue to cautiously spend money where it has the best chance of an enhanced ROI. We continue to improve our home (the structure and systems), we get needed medical checkups and care (can’t afford to be sick due to neglect), we service our cars and continue to invest money wisely.

Pulling the plug on education or medical services would be stupid in the extreme.

This is why I can’t support the suggested rollbacks in K-12 education, higher education or Medicaid and essential social services.

Gibbons can close the prison in Carson City today, and if he has his way with education cuts, can open it back up a few years from now.

Ain't this the truth! If we keep shirking our responsibilities to our people, all we'll get is more of the same: overcrowded prisons, inadequate schools, roads falling apart, and way too many people using the UMC emergency room for "primary care".

Well, at least we have a few sane folks like Progress Now Nevada and PLAN stepping up and taking action. And seriously, we need to join them if we want to save our state. Yes, yes, I know this is an election year and no one wants to go against the "no new taxes" mantra.

But you know what? Mining isn't paying its fair share. Small businesses can't afford a state where its workers can't survive. Big businesses are just taking advantage of our regressive tax structure to get their "money for nothing and chicks for free". Working families can't afford any more of the tax burden being placed upon them. And once and for all, we can't just rely on casino revenue to survive any more!

Gibbons is irrelevant. His ideology is failed. So why should we follow his queue to commit complete economic suicide?

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