Commentary - November 2005

Tax Restraint & Your Business

by Lyle Brennan

Assemblywoman Sharron Angle kicked off the signature collection for The Angle Property Tax Restraint (Nevada Style Prop 13) petition on September 14, 2005. The media Chicken Littles proclaimed that the sky will certainly fall for education, county government and businesses in Nevada. They point a hysterical finger at California’s excessive spending spree on the back of increased taxes and fees for business. Without reining in government spending, our attempts at property tax restraint will allow government to increase other taxes and fees as it continues spending money. Tax restraint is only one side of the equation; limitation of government spending is the other. Nevada-style Prop 13 and a spending limitation such as Colorado’s TABOR complement each other like a lock and key.

Jarvis and Gann knew California’s Proposition 13 in 1978 was not enough to stop run-away government spending. Former Governor Jerry Brown called a special election in 1979 that passed Gann’s spending-limit initiative Proposition 4 by nearly 75 percent of the voters. Since the 1970s, 28 states have placed tax and spending limitations on the books.

Colorado voters adopted a form of Gann’s initiative in 1992, giving it the acronym TABOR for Taxpayers Bill Of Rights. Between 1997 and 2000, Coloradoans received $3.25 billion in TABOR rebates. TABOR freed up private sector capital that doubled jobs and boosted productivity. Between 1992 and 2002, the average Colorado family paid some $16,000 less in state taxes than in the decade prior to TABOR’s implementation.

It is apparent – and supported by the $653 million surplus – that faulty and unreliable methodology led to unnecessary tax increases here in Nevada in 2003. If Assemblywoman Angle’s Property Tax Restraint (Prop 13) and Nevada Tax and Spend Control (TABOR) limitations had been in place, there would have been no unjust tax increases. TABOR in Nevada would be a conduit to refund surpluses to the taxpayers, stopping tax-and-spend government salivating over spending sprees on new programs that will cost future generations to maintain.

Senator Dean Rhoads complained to the Las Vegas Review Journal, "Placing such spending limitations in the state constitution takes away the ability of lawmakers and local government officials to do their jobs." However, Senator Rhoads and other politicians need to understand that dissatisfied voters do support other candidates, but tire when elected officials side with special interests. Their only recourse is to use the initiative process to put taxpayer protection guarantees in the Constitution.

"I was in Colorado when TABOR was passed there. When the money in government becomes more important than the people you are serving, then it is time for taxpayers to take matters into their own hands," said Lyon County taxpayer William Downs. The way to tame a government is to put it on a stable diet of tax-and-spend limitations. What is the priority of government: more surplus revenues or true accountability, which keeps hard-earned money in the pockets of the citizens of Nevada?

The "need for more funds for more programs" is the argument for higher property taxes, based on the unreliable assumption that if there is any potential need, great or small, it justifies the expenditure of public money. Residential and commercial properties are targeted because owners will pay the cost rather than lose their property. The provisions of a Prop 13 prevent governments from freely raising property taxes. The Angle Property Tax Restraint rolls property taxes back to 2003-2004 values assessing a rate of 1 percent of that taxable value. Taxes cannot go up more than 2 percent per year and the property cannot be reappraised until the sale of the home. The Tax and Spend Control for Nevada would limit government spending to population growth plus inflation, with the excesses refunded to taxpayers.

One "fairness" argument against a Prop 13 attempts to politically isolate businesses by saying they aren’t paying their fair share. Of course, it overlooks two facts. Fact No. 1: businesses don’t pay taxes; they pass them on to people, who pay the taxes. Fact No. 2: when California’s Prop 13 passed in 1978, businesses were paying about two-thirds of the property tax and today they are still paying about two-thirds of the property tax. Prop 13 makes property taxes predictable and stable when developing a successful business plan or a family budget plan. Prop 13 was found to be fair to all property owners, new or old, business or residential, by the California Supreme Court in 1980 and the United States Supreme Court in 1992.

Folks, we all need to get behind this Property Tax Petition and sign it. To download the petition go to: www.nbj.com/nvprop13.pdf . For more information on Prop 13, go to: www.wethepeoplenevada.org .

COMMENTS? email: lyle@nbj.com

Lyle Brennan Publisher
COMMENTS? email: lyle@nbj.com