Three Questions: Taxation

Jonathan Williams of the Center for State Fiscal Reform looks at Nevada's finances

jonathanwilliams-400x600.jpgJonathan Williams wants states to get their budget priorities straight; for instance, by making agencies write mission statements, and then holding them accountable for the money they spend. As the head of the Center for State Fiscal Reform at the American Legislative Exchange Council, or ALEC, Williams developed a conservative reform method called Priority Based Budgeting. He took time recently between a talk at the Las Vegas Country Club and a trip to the Nevada Legislature to share his views on how the Silver State is handling its treasure.

Where does Nevada fall in ALEC’s Rich States/Poor States competitiveness index?

Fairly well—18 out of 50 in both performance and outlook. I wouldn’t say it’s the ideal state. … Utah stands out as being the ideal state in the region. However, Nevada has some positive attributes—the possibilities people have to start businesses and work here.

Yet this business-friendly environment doesn’t seem to have helped our economy. Why?

The downturn of the real estate market hit Nevada harder than almost anyone else, so it’s certainly been a rough road to recovery. But based on what we’ve seen, [even] as the tapering off of the population happened over the last couple of years, Nevada still attracted 350,000 Americans over the last decade, which is sixth-best nationally. The employment growth was strong during the last decade. So, I think the last few years have been an aberration, but you have some strong trend lines. Given the incentives—no personal tax, no corporate income tax—I would expect that to intensify going forward.

Given Nevada’s pressing needs in education and infrastructure, do you still think the proposed margin tax is a bad idea?

In terms of the politics of it, it’s easier not to have to prioritize and just find more revenue for people who want it. [But] there are lots of ways to raise revenue—some more damaging than others—and I think a gross-receipts tax, which the margins tax is, is about the worst way. In my home state of Michigan it was repealed a few years ago because of its horrible drag on the economy. It’s a way of taxing individuals, but passing it through business.

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