Gov. Jim Gibbons apparently told an audience of Las Vegas Chamber of Commerce members on Thursday that “uncertainty” about Nevada’s tax system was keeping new companies from moving to the Silver State. Chief among their concerns? The possibility — however remote — that Nevada may enact a gross receipts tax.
“Their greatest fear is not the education system, but the lack of predictability in taxes,” said Gibbons, according to a story atop today’s Review-Journal business section, by Las Vegas Business Press reporter Valerie Miller. The story went on to quote Gibbons thus: “Right now, we are having a difficult time competition with Texas and, in some cases, Arizona and New Mexico.”
Of course, that’s bullshit. Why?
Texas has a gross receipts tax on businesses, adopted a couple years after Nevada’s infamous rejection of that idea during the 2003 Legislature. Thus far, except for the occasion gubernatorial musing about succession, Texas has yet to shut down as a state, and, according to Gibbons, is a tough competitor for tax-free Nevada.
And Arizona and New Mexico? Both states have both personal and business income taxes. Yet, according to the governor, they are drawing businesses away from Nevada? Because of uncertainty about our tax structure? Isn’t that like somebody who’s afraid of flying bypassing a ride in a safe 747 jumbo jet in favor of strapping himself to the upper wing of a bi-plane?
The story indicates Miller interviewed Gibbons after the luncheon, but gave no indication as to whether she asked Gibbons how he could possibly say that states with more taxes were attracting businesses over low- or no-tax Nevada.
And another question for the governor (and the R-J, for that matter). How is it that the centers of innovation and business in America always seem to be located in higher-taxed jurisdictions? Take, for example, Silicon Valley and the computer industry (California — personal income tax, business income taxes and supposedly onerous regulations) or Wall Street and finance (New York City — personal income tax, business income tax, even a city tax!).
Could it possibly be because those other areas have better infrastructure than Nevada, including better educations systems to train the children of company employees and produce qualified, local people to enter the workforce? Could it be because there’s a better quality of life?
Put another way, if low taxes attracted quality businesses, why hasn’t Nevada — with a history of low taxes — become the center of any business except gambling over its history?
One wag long at the center of the push for a gross receipts tax proposed a deal: He’ll give up that idea in favor of implementing the tax system currently at work in New Mexico and Arizona, which the governor has already acknowledged is no barrier to attracting new business. How about it, Nevada? Ready to start paying some personal income tax? And business taxes? Hey, we just might end up attracting some nice, new businesses with that stable, certain tax system.
Maybe the R-J will ask about that next time?
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