Democratic tax plan: If not now, when?
Never let it be said Nevada’s Democrats make things easy on themselves.
This week, we’re told we’ll be seeing a Democratic plan for Nevada’s tax system, an answer to Republican Gov. Brian Sandoval’s proposal to increase the business license fee and make it progressive, based upon a businesses’ gross income. Thus far, Democrats have been relatively silent about their ideas.
That changed last week; state Sen. Pat Spearman, D-North Las Vegas, gave a presentation to the Senate Revenue and Economic Development Committee (on which she sits) about her approach to taxes. Complete with a 20-page Power Point presentation, the session was long on soaring rhetoric (“for me, this is a moral imperative,” she said) but short on specifics, save one: Spearman pledged to do away with the state’s payroll tax.
Otherwise known as the Modified Business Tax (MBT), the payroll tax is considered by some an impediment to hiring, but it’s perhaps counterintuitively loved by business, in that it’s easy to control, to predict and to calculate. Increasing the MBT (or eliminating exemptions that prevent small businesses from paying the tax) is one of the alternatives to Sandoval’s plan that’s being advocated, especially by those businesses with smaller payrolls and less at stake.
Spearman’s promise would add millions of dollars to any proposed revenue plan, assuming she’s not advocating big cuts in the budget. She’s now not only got to explain where she’ll get the extra money to cover Sandoval’s plans for increased education spending, but also how she’ll replace the missing revenue from the MBT. And as of Thursday, she didn’t have a ready answer.
“What I wrestle with is what do we replace it [the MBT] with? I haven’t gotten there yet,” she said.
On Monday, legislative Democrats will reportedly gather to announce their plan, not only for taxes, but also for an agenda for Nevada’s middle class. Journalist Jon Ralston, writing in the Reno Gazette Journal, reports that Democrats will release a “political and policy manifesto” design to answer the thus-far-dominant Republican agenda.
The specifics? According to Ralston’s column, they include exempting small businesses from new fees and taxes (under Sandoval’s plan, every business would pay more than they currently do, although many would just see their fee increase from $200 to $400). There’s also a sales tax holiday and lower car registration fees.
Those ideas, like Spearman’s, will take money away from the budget, not add to it. When it comes to revenue, Ralston warns us not to expect too many specifics outside of Assembly Minority Leader Marilyn Kirkpatrick’s live-entertainment tax reform (which could finally capture big events such as the Electric Daisy Carnival, NASCAR races and Burning Man).
Not to be an alarmist, but if we can’t expect specifics on a tax plan on Day 36 of the 120-day session (that’s nearly a third of the way through!), when can we expect them? And given that Democratic plans apparently will need to raise even more money than the governor’s recommendation, doesn’t the urgency become even greater?
Senate Majority Leader Michael Roberson thinks so: “I do feel a sense of urgency,” he told Spearman at the hearing, after she remarked that a tax plan had to be right, not rushed. Roberson knows the challenge of passing any plan — including Sandoval’s — will come in the Assembly, and he wants to allow plenty of time to avoid a sine die showdown. “We’re running out of time. We really are.”
It’s not clear Democrats feel that same sense of urgency, even as they witness the fracturing and dysfunction in their Republican colleagues’ caucus.
But perhaps that’s understandable: For years, Democrats were the ones calling for additional funding for education, for increased taxes to pay for it. They never counted on a day when a Republican governor, assisted by a Republican state Senate majority leader and a Republican speaker of the Assembly, would steal their script and make it their own.
It’s disconcerting, perhaps so much so that coming up with an alternative is more difficult than expected.
The question Democrats should be asking, however, is not what do we do now that Republicans have stolen our hymnal and are singing at full volume our favorite songs. The question they should be asking is, if the Republicans want to enact our agenda, at least when it comes to taxes and schools, why do we even need an alternative at all?
It can’t be what some are suggesting behind closed doors in Carson City, that Democrats want tax reform, but they don’t want it to happen under a Republican governor or a Republican-controlled Legislature (especially since their party failed — albeit under three Republican governors — to get the job done). That may make sense politically, but, if true, it would be the most cynical betrayal of the common good since the Mean 15 of 2003. If that was the case, then we may as well admit right now that Democrats don’t deserve to win back either house in 2016.
But let’s assume for the moment that it’s not. Instead, let’s view the situation in the light most favorable to the Democrats: They like the governor’s plan, acknowledge it’s something they’ve been wanting for years, but think it can be better, go further, do more. In that event, we need very badly (and very quickly) to know two things: What is their alternative, and is there any way in hell it can pass a Republican-controlled Legislature and get signed by a Republican governor?
If Democrats have those specifics, and that plan, by all means, let’s see the details. But if not, they should carefully consider the fact that there are forces in Carson City that intend to delay, obstruct, divert, interfere and even sabotage the process as much as they can in the hopes of getting to sine die with the status quo still firmly in place. A long, drawn-out search for alternatives serves the status quo agenda, which means Democrats should pursue alternatives only if they’re viable.
If not, there’s a perfectly acceptable alternative plan coming out next week, too: It’s Sandoval’s.
