Nevada Teachers: Let’s Tax Casinos to Raise Our Pay

December 13, 2007

In what is quite possibly the most blatant attempt to use government power to take from one group to give to another, teachers unions in Nevada are proposing to tax casinos to give themselves a pay raise and to pay for some other government services. From the Las Vegas Sun:

Two ballot initiatives to raise taxes on Nevada’s biggest casinos by about 20 percent and generate up to $2 billion a year for teachers’ pay, highway construction and other projects were filed Wednesday by Las Vegas lawyer Kermitt Waters.

Waters said the casino tax increases in the two plans are similar, although one proposal also would eliminate property taxes on primary residences. He said he filed both with the secretary of state’s office so that voters could decide which one they want.

The proposals from Waters follow a plan from the Nevada State Education Association that would raise the taxes on casinos that gross more than $1 million a month from 6.75 percent to 9.75 percent. That plan would generate at least $250 million a year.

All three proposals would have to win voter approval in the 2008 and 2010 elections. The one that gets the most voter support in 2010 would take effect. To qualify for a spot on the ballot, each plan will need at least 58,628 signatures from supporters. Those signatures are due by May 20.

The proposal from the NSEA, representing teachers, would use the new tax revenue to help the state’s K-12 school system.

Under one of Waters’ plans, property taxes on primary residences would be erased. Under both plans, 35 percent of the new revenue would be used to help cover a shortfall in highway construction funding; 25 percent would be used to improve pay of teachers; and 25 percent would be used for alternative energy projects and water desalination plants in southern Nevada.

Are teachers in Nevada underpaid? Who knows? But even if the answer is yes, should casinos, an arbitrarily selected industry, have their taxes raised to pay for the raises? Absolutely not.

This proposal is basically just a case of trying to tax the guy behind the tree, most notably stockholders of casino companies and tourists (out-of-towners typically), while no justification is really given for such a tax from the backers. All they cite is the need to have more education money. Well, we could do that by taxing anything. How about taxing prostitution? How about taxing boxing tickets? Why not impose a special Michael Buffer tax? How about Nevada impose a specific tax on admission to Wayne Newton and Penn & Teller shows? Or Nevada could even take a page from the Texas legislature by imposing fees on admission to adult entertainment.

This is unfortunately yet another example of a special interest trying to have resources flow its way via terrible tax policy.

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