Editorial: No need for further sales tax exemptions

Question 4 on the November ballot proposes to amend the Nevada Constitution to require lawmakers to pass a law exempting certain durable medical equipment — such as oxygen tanks, wheelchairs and ventilators — from the state sales tax.

Who doesn’t want to lighten the financial burden on the infirm?

The problem is that the sales tax was designed to be a broad and fair tax affecting just about everyone equally, though food, medicine and some medical equipment are already exempt. It is estimated tax revenue would decline by about 0.025 percent if this were to pass, but it is likely everyone else eventually will be asked to make up the difference. Schools are already complaining of not getting enough tax revenue as it is.

“Basic budget principles state that when expenses exceed revenues, debt is created,” reads the argument against Question 4. “When the law requires state or local government agencies such as schools to be funded, the law expects a set amount of revenue to fund that agency. When a tax exemption reduces the amount of revenue expected, the agency has no choice but to request a replacement of the lost funding.”

State Controller Ron Knecht objects to the fact the proposal amends the Constitution, making modifications in the future difficult. “While this may be a good idea, it raises many questions in context of the various things the state does and does not tax,” he writes. “But even if one concludes as a matter of sound tax policy that these items should be tax-exempt, the legislature already has the power to exempt them now. Once again, enshrining these provisions in the constitution would prevent timely reform of any parts of the proposal that may be found to merit change or repeal later.”

It is also noted that the language is vague and it is difficult to predict just what lawmakers might exempt and whether that estimate of 0.025 percent lost revenue will hold up.

“Tax exemptions have consequences for the taxpayer; the same consequences as tax subsidies, tax breaks, tax abatements, and tax incentives,” the argument against states. “The Nevada Department of Taxations’s 2013-2014 Tax Expenditure Report states that Nevada has 243 such tax expenditures that cost taxpayers over $3.7 BILLION a biennium. Who is footing the bill for all those exemptions? You, the local taxpayer.”

There is no evidence the current sales tax has in any way inhibited the ability of people to purchase necessary medical devices. We need not burden the Nevada Constitution with another special carve out for certain special interests.

A version of this editorial appeared this 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.

13 comments on “Editorial: No need for further sales tax exemptions

  1. Bruce Feher says:

    I’d like to see at least one more thing to be excluded from the sales tax, ME!

  2. Bob Coffin says:

    Absolutely right. And, the “Pink Tax” is the best name for bad law there ever was. All parties played the exemption game for wedge issue purposes in the 80s until everyone got tired and came to their senses.

  3. Anonymous says:

    Some people are just more equal than others.

    “Kushner is worth more than $300 million and has earned millions off his family’s real-estate holdings but has paid little in taxes, The Times reported Saturday after obtaining confidential financial documents.

    The report concluded that he appeared to have paid almost no federal income taxes for several years running.

    The Times piece follows an in-depth investigation the paper published earlier this month on how Trump used a special tax-sheltering vehicle known as a grantor-retained annuity trust (GRAT) to inherit millions of dollars worth of his father’s real-estate tax free.”

    I guess this inheritance tax break made sure that the Trump “family farm” was saved, praise Jesus.

    https://thehill.com/policy/finance/411260-nyt-kushner-paid-almost-nothing-in-taxes-thanks-to-business-tax-break

  4. Rincon says:

    Tax deductions of all kinds are atrocious. If we want to help the infirm, that’s fine, but keep the taxes the same for everybody and then help pay for the medical equipment directly. This prevents people like Steve from becoming confused. He believes that tax deductions are not equivalent to subsidies. I’m sure a lot of other people feel the same way. Eliminating tax deductions and then subsidizing those that we choose keeps it simple and honest.

  5. Steve says:

    “He believes that tax deductions are not equivalent to subsidies.”

    Again, making up things/ attributing them to others.

    It was you who claimed oil companies get subsidies.

  6. Rincon says:

    Yes, and you said that subsidies and tax breaks aren’t comparable

    If the government was to get rid of tax breaks and just pay subsidies to oil companies, the bottom line would be the same and folks like you wouldn’t get confused. No deductions are defensible in my opinion, partly for this reason.

  7. Steve says:

    Oil. Companies. Don’t. Get. Subsidies.
    And no, the “bottom line” would not be the same. Under your twist, only those companies would get benefits while all others would not.
    All oil co’s get now is the same tax deductions every other business gets.

    Solar and wind and TESLA get all kinds of “targeted” subsidies and tax breaks no other business get.

    I would love to see no subsidies and no tax breaks and no tax deductions of any kind.

    You would freak if a real flat tax was ever tried.

  8. Rincon says:

    “All oil co’s get now is the same tax deductions every other business gets.”

    Your memory is failing you a bit today. We’ve been through this before. From Investopedia: “Several major tax benefits are available for oil and gas investors that are found nowhere else in the tax code.” You can read all about them here: https://www.investopedia.com/articles/07/oil-tax-break.asp

    There’s another subsidy that I don’t think the article addresses, worth approximately $65 billion in the 1990’s: Gas and oil companies can drill royalty free in the Gulf to their hearts’ content.

    I do like your thought though, that you would love to see no subsidies or tax deductions of any kind. At least we agree on something…almost 🙂 Although I want to abolish all tax breaks, I believe subsidies are reasonable when the market fails to adequately address an issue such as the orphan drugs program with pharmaceutical companies or with government funded basic research. They should only be used carefully and infrequently.

  9. Steve says:

    As usual, you think you found something specific to one industry when those types of tax regs are written for specific actions and equipment that mirror actions and equipment of one form or the other in all industry. Those rules are written to limit the tax deductions taken by specific industries, not to give them more. For one point, every startup gets certain tax incentives similar to a new drilling operation.
    Tax law happens to be industry specific for multiple reasons.
    But, go right ahead and continue to believe your world view…As an investor in several, I have seen what master limited partnerships do with tax law. (Hint, DO NOT hold any of these in a 401k or IRA, that could cost your account, “bigly”)

    Here’s one example of tax breaks similar to those oil companies use with new drilling operations.
    The key to this is “new”.
    There are plenty more.

    https://www.startupgrind.com/blog/how-startups-can-benefit-from-250k-rd-tax-credits-and-deductions/

  10. Rincon says:

    “All oil co’s get now is the same tax deductions every other business gets.”
    “Tax law happens to be industry specific for multiple reasons.”

    Pick one, Steve. You can’t have both.

    So you found one tax break for startup R&D and you think it proves that oil companies aren’t getting anything special. A conversation this moronic isn’t worth having. Count me out.

  11. Steve says:

    “moronic”

    You don’t like it when you are wrong so you go the playground route.

    typical

  12. Rincon says:

    “As usual”, “Again, making up things…” and “Typical” are also part of the playground route. I was merely answering at your level. If you don’t like the playground route, I am happy to abandon it as long as you do as. well.

  13. Steve says:

    Ahh then. We have the admission you got nothin.

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