Editorial: Fallacious Supreme Court ruling probably dooms commerce tax referendum

Though anyone capable of signing a petition with anything other than an “X” understands that a vote to repeal a tax would require lawmakers to either cut spending or find revenue elsewhere, the Nevada Supreme Court in its infinite pettifogging wisdom ruled this past week that Nevada voters are just too darned dimwitted to understand this and must be lead by the nose.

The unanimous opinion found the description on the petition seeking to repeal the commerce tax passed by the 2015 Legislature failed to tell signers of this fact and therefore was misleading and deceptive.

The group RIP Commerce Tax, headed by state Controller Ron Knecht, had already gathered 20,000 signatures of the 55,000 needed by a June 21 deadline before it suspended circulation of the petition pending the court’s decision. Now those 20,000 signatures are invalid and the process must start over with only a month to go.

Knecht vows to try to qualify the referendum for the November ballot, though he concedes the chance of getting enough signatures is uncertain.

He plans to quickly submit new wording for the 200-word petition description to the district court judge who had approved the previous description. The new description lifts language and figures from the Supreme Court opinion and adds a sentence saying: “So, there would be a net $74.9 million reduction in state fiscal year 2016/17 revenues, technically unbalancing the budget, and $59.9 million in succeeding years.”

The commerce tax would impose a gross receipts tax on all businesses grossing more than $4 million a year. It has different tax tables for 27 different industries — ranging from a low of 0.056 percent for mining to a high of 0.362 percent for rail transportation in 67 different levels of revenue. Future legislatures could increase rates or lower the threshold.

Lawmakers passed the commerce tax with a two-thirds majority in a Republican-controlled Assembly and Senate for signature by a Republican governor, even though voters turned down at the ballot box the previous November a nearly identical, though considerably larger, version of the commerce tax by a margin of 4-to-1.

The Supreme Court ruling said repeal of the tax would lead to an unbalanced budget, which the state Constitution prohibits, and “the description of effect makes no mention whatsoever of this critical consequence. Accordingly, we conclude that the referendum’s description is deceptive for failing to accurately identify the practical ramification of the commerce tax’s disapproval, and any signatures obtained on petitions with this misleading description are invalid.”

Apparently, snipping $60 million a year from a multi-billion-dollar state budget creates a crisis, even though in the real world the state managed to survive when the recession axed the state revenues by $536 million from 2008 to 2009.

Also, Michael Schaus, communications director at the Nevada Policy Research Institute, points out just how phony that balanced budget argument is.

The revenue from the current commerce tax will be deposited in the state treasury by Aug. 15 — before the November elections — meaning no revenue loss this fiscal year. The Legislature meets in February 2017, giving it ample time to deal with a potential dearth of commerce tax revenue by next August.

“There would be no crisis, no devastation of government agencies and no budgetary hole,” Schaus writes. “The court’s ruling says the petition must now include language warning against a hole in the state budget — a hole that, in truth, is imaginary.”

Though odds of the tax repeal being on the November ballot are rather long, having it on the ballot might create a quandary for astute voters.

Knecht’s petition description — old and new — notes that disapproval of the commerce tax “does not prohibit the Legislature from enacting future legislation that imposes a commerce tax,” conceivably an even more onerous one.

But the Supreme Court ruling notes that if voters let the commerce tax stand, it “shall not be amended, annulled, repealed, set aside, suspended or in any way made inoperative except by the direct vote of the people.” Doesn’t not amended mean not increased?

It would be tempting to freeze it from legislative meddling, because, as the lawyer for RIP Commerce Tax pointed out in oral arguments before the court, when the income tax was created in 1913 it was supposed to be only on millionaires, but today everyone pays. “Now, the two things I’ve noticed about government, it never gets any smaller, taxes never go down,” the lawyer said.

If given the opportunity, we encourage voters to sign the petition so we might face just such a quandary.

A version of this editorial appears this past week in some of the Battle Born Media newspapers — The Ely Times, the Mesquite Local News, the Mineral County Independent-News, the Eureka Sentinel,  Sparks Tribune and the Lincoln County Record.

Update: On Friday a Carson City judge approved new language for the petition that includes a mention of the deficit that would be created by repeal of the tax, according to the Las Vegas newspaper.



47 comments on “Editorial: Fallacious Supreme Court ruling probably dooms commerce tax referendum

  1. Patrick says:

    The lawyer…who “noticed” that “taxes never go down” isn’t fit to practice because either he’s too stupid to recognize that was he said was not true, or he’s a liar because he knows that they have.

    Many times.

  2. And then gone right back up.

  3. Patrick says:

    Not true. In or about 1940, the top marginal tax rates in the US were 90%. They have gone down since then to less than 40% in (mostly) graduated steps.

    As I said, the guy is either too stupid to know this, or he’s a liar.

  4. Patrick says:

    Interesting but yet in no way contradicts the fact that the “lawyer” either was too stupid to know that what he said was wrong, or that he’s a liar.

    And, more interesting is that, while so many uninformed “conservatives” assert that the government ought to be run like a business, the fact is that business debt loads are actually equal to or surpassing the governments on a “GDP” basis.


  5. Steve says:

    When faced with facts, doudle down and try changing the subject.

    Sham plea strikes again!

  6. Steve says:

    Band Aid on finger.

    What’s your excuse?

  7. Rincon says:

    The petition itself illustrates a truth discovered by scientists over and over again. Whenever conduction a poll, questionnaire, referendum, etc., the phrasing can change the side that many people take in a very dramatic way. So far as I know, the creators of the petition, just like the Tea Partiers with their no new taxes pledge, are silent about spending. They just don’t want to pay. The title on the petition should say, “Let’s stick the kids with the bill”.

  8. Steve says:

    Disagree, it’s blatantly clear revenues would not be impacted before the 2017 session and it’s just as clear that same session would be forced to consider other options to replace or adjust, as a result, if the question were to gain the votes needed.

  9. Rincon says:

    My comment was more of a generality. I am not well versed on Nevada’s financial situation and so, am not really qualified to comment specifically. My point was that when petitions and referendums (my spell check says that. I always thought it was referenda) have such great consequences, the phraseology is an important and integral part of the process, not just a pesky detail.

  10. Barbara says:

    Another telling example of how difficult it is to reduce or eliminate taxes once they are passed. I hope everyone checks the voting record of their state office holder before they vote in the upcoming election. This also is a testament for term limits even for judges. Holding any public office should not be a career.

    Tax rates may go up or down, but I agree with the attorney’s premise that in general, government finds a way to increase its take whether through eliminating/reducing deductions or increasing or adding taxes through fees. I’ve never in my lifetime seen the reach or size of government shrink

    Make no mistake, when the bill for the expansion of government comes due, whether it is for the many unfunded liabilities (pensions, expansion of Medicaid, etc.) that $4 million threshold will soon be lowered to expand the tax base.

  11. Patrick says:

    The attorneys statement wasn’t a “general” statement about taxes going up or down.

    The quoted statement was, inter Alia, that taxes “never” go down. This was wrong and/or a lie.

  12. Barbara says:

    ” In or about 1940, the top marginal tax rates in the US were 90%. They have gone down since then to less than 40% in (mostly) graduated steps. As I said, the guy is either too stupid to know this, or he’s a liar.”

    The attorney never said anything about tax RATES. Taxes collected are not based solely on rates. To believe otherwise is, well, as you said Patrick just stupid or a deliberate attempt to mislead.

    A cut in tax rates does not necessarily mean less taxes are being collected.

  13. Anonymous says:

    It is not reasonable to believe that the attorney was, instead of speaking about marginal tax rates “never” decreasing, that he instead intended to argue that it has never happened that the the “taxes paid” by any particular individual decreased. His use of the statement “Now, the two things I’ve noticed about government, it never gets any smaller, taxes never go down,” demonstrates that he was not referring to taxes paid by an individual, but instead the taxes called for by the government.

    But, even giving credence to an “unreasonable” intention means that the “attorney” was still either wrong or a liar since the “unreasonable” interpretation would mean that NO ONE, ever “paid” lower taxes (in absolute terms) which is demonstrably untrue since some people who worked one year, and didn’t work the next, will pay taxes that, on an absolute basis, are lower.

    Finally, the only other “unreasonable” interpretation is that the government has never COLLECTED less in taxes, than they collected in a previous year. This is also wrong, and if the “lawyer” knew the facts, and said otherwise, he lied.

  14. Steve says:

    Parsing words with the king of the sham plea is a fun excersize in wasting time.

    Remember, he tried to use a sham plea as proof “shall” really means “may”

    All this does is waste time, intentionally.

    The message in the quote is clear. Taxes, over time, always increase. Taxes have never gone dfown in a permanent manner, the only “proof” the king of the sham plea now offers is people who loose a job and economic forces which temporarily lower revenues.

    This line of argument is yet another sham.

  15. Anonymous says:

    Stevetard I said it before, and I’ll say it again:


  16. Steve says:

    Sham insult….just as id10totic as your sham plea.

  17. Patrick says:


  18. Steve says:

    Funny, sham plea thinks words on a monitor hurt people.
    Apparently, in his case, that is so.
    Concession by attempted insult, noted.

  19. Patrick says:

    Stevetard is not sad, just dumb.

    No more an insult than suggesting that’s it’s raining; it just is and acknowledging it doesn’t change anything.


  20. Steve says:

    Proving my statemnet with every post, it’s the Sham Plea King!

  21. Patrick says:

    If Stevetard makes it into the dictionary, and they put a photo of Steve to go along with the definition, would that make Steve famous or infamous?

  22. Steve says:

    Patrick, the king of the sham plea, made an effective subgect change.

    To reiterate, this line of argument is yet another sham.

  23. Rincon says:

    On Thomas’ graph, total taxes have indeed dropped by a small amount since 1999. In 1962 or so, they were about 25% of income. Today, it’s about 27%. Hardly the catastrophe that Conservatives make it out to be.

    From The Atlantic: ” Every income group is paying a smaller share of their income to the government than we were in the late 1970s.” http://www.theatlantic.com/business/archive/2013/04/how-we-pay-taxes-in-14-charts/274979/

  24. Steve says:

    Like every other economic track, tax revenues have dips and highs.
    The overall trend is up.
    Specially when you take into account the claims made by the Sham Plea King!

  25. Tom Jefferson said governments tend to grow and liberty retreat.

  26. Patrick says:

    The “lawyer” said taxes NEVER go down.

    He’s either stupid, or a liar, or both.


  27. Patrick says:

    And lest we forget the first part of the “lawyers” remarks about the government “never” getting smaller.

    As measured by employees, yet another statement that he made that was wrong, or a lie. (And of course, this is only for the last 50 years)


  28. Steve says:

    Yup, another effect of the “Great” Recession.

    More proof you are pulling at straws.

  29. Patrick says:


    Total US government employees 1990. 3.1 million

    Total US government employees 2005 2.7 million

  30. Patrick says:


    at no time in the past or future; on no occasion; not ever.

    synonyms: not ever, at no time, not at any time, not once;


  31. Steve says:

    Oh, shammy, shammy, shammy…..you love to pick your data points and ignore what is really happening in your quest to sleigh those windmills!

    “When you include state and local governments, it’s clear where the public civilian workforce has been growing in recent decades.”

    “Local governments, in particular, have boomed from 4 million employees in the 1950s to over 14 million today.”

    You are trying to change the definition of “government” now!

  32. Patrick says:



    at no time in the past or future; on no occasion; not ever.

    synonyms: not ever, at no time, not at any time, not once;


  33. Steve says:

    A direct result of the “great”recesion this time!

    Convoluted and slippery is the shammy plea!

  34. Patrick says:


    at no time in the past or future; on no occasion; not ever.

    synonyms: not ever, at no time, not at any time, not once;


  35. Steve says:

    insignificant response shows shammy plea is truly and completely a sham.

  36. Steve says:

    Picks data points out of conflicting sources.
    Chooses time frames that most benefit his sham.
    makes abundant leaps of faith at a single bound.

    Who is it?
    It’s Shammy plea!
    King of the twisted plea intended to to keep the facts from surfacing, shammy throws all kinds of may’s and shall’s in the mix to keep people from actually seeing what happened as shammy changes the topic incessantly.

    Shammynoid.. You are so predictable.

  37. Patrick says:

    ““Now, the two things I’ve noticed about government, it never gets any smaller, taxes never go down,” the lawyer said.”


    at no time in the past or future; on no occasion; not ever.

    synonyms: not ever, at no time, not at any time, not once;

    He’s either too stupid to know he was wrong or he lied


  38. Steve says:

    All your links prove he’s correct.

  39. Patrick says:

    Stevetard/ adj.

    Too stupid to understand anything.


  40. Steve says:

    The guy who tried to use a sham plea to prove his contention the word “shall” actually means “may” calls ME stupid…..

    This is absolute proof, in Patrick’s world, ignorance reigns!
    And Patrick is king.

  41. Rincon says:

    Don’t let him suck you in, Patrick. Looking at these entries, Steve has shown no evidence, He’s only denying what you say and throwing insults. This is not debate, it’s recess.

  42. Steve says:

    Patrck posted all the “evidence” I needed!

    If all else fails, read his links!

    Blind providing solace to the blind.

  43. Steve says:

    Special, just for Nyp and Patrick. These are you guys peeps! snigger…..


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