MY COLUMN: The Great Margin Tax Dilemma


I want to vote against the margin tax. I really do.

I recoil at the idea of making serious tax policy at the ballot box. The tax is not written well – it has a fiscal cliff, the rate is too high. And I do not want to lose my faith in the Legislature to do its job, as hard as the Gang of 63 tries to make me do so.

I have many reasons to vote against it. But I just may vote for it.


Because of the history of false promises from those spending millions to defeat it and because of their breathtaking arrogance in campaigning against it.

In all the years I have covered politics, I have never seen the brandishing of apocalyptic language, the frothing by those who should know better, the cascade of distortions by the Coalition to Defeat the Margin Tax, a k a The People Who Don’t Pay and Don’t Give a Damn.

I expected the usual suspects to oppose the tax – gamers, miners, retailers, chambers, NPRI. But I also have never witnessed such a series of unprecedented events that so encapsulates the desperate fervor and malleable ethics of opponents:

►A putative newspaper, The Las Vegas Review-Journal, has used its house ads, supposedly to be for advertising their own people, for anti-Question 3 propaganda. The newspaper-cum-PAC has intentionally misled readers into believing these are paid advertisements by appending a black ribbon encasing Lilliputian print saying, "A message from the Las Vegas Review-Journal." A national news watchdog has picked up on the journalistic atrocity.

A university president, feeling pressure from his business and gaming pals, publicly distanced the institution from a margin tax study that was a little too positive for opponents, thus making academic freedom an oxymoron on Maryland Parkway. This is a Tier One catastrophe, calling into question whether UNLV wants to be a serious institution of higher learning or an adjunct campus run by doyens on the nearby Las Vegas Strip. 

Organized labor, which supported the concept and even the current iteration, has clambered into bed with gaming and business because not only is prostitution legal in Nevada, so is political incest. It began with the AFL-CIO, but then the Culinary union, rolling over to remember it is in bed with gaming.

While Republicans have reflexively opposed the tax, out of Pavlovian habit or donor-smooching, Democrats have made Bert Lahr look brave. With few exceptions, they have run from reporters, offering lame equivocations or muddled evasions.

The teachers union, which has its own internal divisions and has not built many bridges the last few years, has been left on a political island, surrounded by a swell of progressives. They have a quarter of the money, have made the best of it and probably will lose Nov. 4.

And they will probably succumb to one of the more disingenuous campaigns I have seen, with scare tactics that seem modeled on 1964's infamous "Daisy" ad, the implication that Nevada would be laid to waste if the tax passed.

Yes, several, serious economic studies, including from Applied Analysis and RCG Economicshave pointed out the flaws – they are DEEP not shallow, remember – and forecast that, possibly, thousands of jobs would be lost and businesses would close up shop and move to friendlier states. You know, like California, I suppose. But academics at both universities, not paid by anyone with a position, have found the tax could produce a net jobs gain.

Perhaps the most insidious canard, repeated by spokesfolk and in ads, is that the money is not guaranteed to go to education. This is, quite simply, false.

The money must go into the state’s education fund, the Distributive School Account. Yes, lawmakers can, as they have done in the past, supplant money from the general fund destined to go to education.

But no honest person believes that if hundreds of millions of dollars go into the DSA that more money won’t be spent on education. But it sure sounds frightening, doesn’t it?

Don’t misunderstand: Some of these margin tax foes are sincere, and some are even thoughtful and want to help fund education and reform the tax structure. I think many really believe the passage of the tax would be disastrous, even if they are not sure. (The gaming industry, through the years, whether out of altruism or self-interest, has always supported broadening the tax base and being part of the solution.) And, yes, especially in a low-turnout midterm, you need to rouse voters from their stupor, so I get, to an extent, the Chicken Little stories.

But too many opposing this idea have thrived in a gaming-driven economy and have balked at every business tax proposal, using the same hyperventilating rhetoric and Cassandra-like predictions. Just ask the coalition what the alternative is and the answer comes as rotely and is, to coin a phrase, deeply flawed: We can only focus on what is on the ballot.

Spare me.

What they are focused on is killing this at all costs, literally, and if they fail, they will sue, gum up the regulatory works to stop its implementation. These are the same people who for decades have made the same offer to help pay for schools and infrastructure and social services that Al Pacino made to G.D. Spradlin in “The Godfather” and that is: Nothing.

I thought the low point came when a guy running the sixth most profitable hospital ($2.5 billion in 2011) in the nation tries to scare people that they essentially would have to use leeches to cure themselves if the margin tax passed. (See, I can use your tactics, too, coalition.)

But I was wrong.

The nadir came last week when car dealers, the poor, ever-generous car dealers, recruited ex-Mayor Oscar Goodman to put down his Bombay Sapphire for a moment and fulminate against a tax I guarantee he couldn’t explain. Really, the guy whose family started a tony private school for Vegas elites is belching forth bombast to kill a funding source for the public school system. Paging Joseph Welch.

Behind the scenes, some of these opponents, including Gov. Brian Sandoval, are talking about alternatives to the margin tax if, as expected, it fails. I think Sandoval sincerely wants to do something in 2015, as do others in the Gang of 63.

Sandoval knows that Tesla and what’s to come will turbocharge the economy but leave too many behind if he doesn’t broaden the tax base and put strained schools, especially ELL-populated Clark County ones, on the right path. He gets it.

Unfortunately, I’ve seen this movie before, and it always ends the same way. Hope turns to frustration turns to anger. The best laid tax plans….

I don’t like this tax. I want to give the Legislature and the governor a chance, not make policy at the ballot. I want to vote against the margin tax.

But I might not.