Tuesday, February 28, 2012

Can You Do This All on Your Own?

Rejoice, Nevada! Taxable sales rose in December!

Taxable sales in Washoe County rose 6.1 percent in December from a year earlier, the state reported Monday, reflecting rising confidence among consumers at the height of the 2011 holiday shopping season.

“That’s reasonably strong given as serious as the recession has been,” said Mark Pingle, economist at the University of Nevada, Reno. “A normal rate is about 3 percent, so that (December figure) is an indicator that we’re coming out of the morass.” [...]

Statewide, taxable sales in December increased by 3.8 percent from December 2010, according to the report.

Happy, happy, joy, joy!

Strong performances in the car and clothing businesses during the Christmas season helped propel taxable sales in Clark County to a 9.5 percent gain in December over the same month a year ago.

The state Department of Taxation reported Monday that taxable sales reached $2.9 billion in Clark County.

For the first six months of the fiscal year, the increase is 7.4 percent, showing a continuing rebound.

The department said statewide taxable sales rose 3.8 percent to $4.2 billion for December. It said the state’s portion of the sales and use tax collected in December was $82.4 million or 2 percent higher than December 2010.

No really, this is great news. When we buy, we win. When consumers get back in the habit of participating in our economy, employers can afford to keep workers. This truly is good news.

Still, I can't help but think of the policy implications here. Remember that because Nevada has no (corporate or personal) income tax whatsoever, we're incredibly dependent upon casinos and consumers to pay our state's bills. Of course it may sound great to exclaim, "Nevada has no taxes!" However, that's not the truth. We have taxes... It's just that the bulk of them are paid by the middle class and working poor.

Nevada is heavily dependent on one of the most regressive forms of taxation ever devised: The Sales Tax. The chart illustrates just how regressive this type of taxation truly is — the lower one’s income the higher percentage of that income is expended on state and local taxation. The State Budget Office estimates that 25.8% of the state government’s tax revenue will be derived from sales and use taxes over the next two years. The next largest amount, 22.3%, is predicted to come from gaming taxes. We know from the State Comptroller’s Office that fully 9% of this State’s total income comes from the sales tax.

Think about it. This year's state budget was mostly riding on our purchases and what tourists did on Las Vegas Boulevard. Seriously, how f**ked up is that?

What we've learned over the years is that this tax system simply isn't sustainable any more. We need real, serious solutions... And solutions that correct the regressive burden on Nevada's working class families.

As we discussed yesterday, we can no longer rely on the casinos alone to save us. However we can't exclusively rely on you to carry this burden, either. Yes, you heard me right. While I'm sure the state really appreciates your contribution to the coffers in Carson City, it's just not fair for Nevada to demand so much from you when the biggest and most profitable corporations in this state pay virtually nothing.

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