It’s time to create a better tax system for hard-working Nevadans. With the passage of the new GOP tax plan (or rather a plan not to tax), states must combat the loss of federal funding, and restructure their own tax system to offset the huge tax breaks for the top 1 percent. The actions of Republicans in Congress cut federal spending on important social services, so now it’s up to Nevada lawmakers to formulate a tax system to help fund services like education and health care, but there is a long way to go.
Nevada has one of the highest combined sales tax in the nation at 8.14%; compared to the highest at 10.02% (Louisiana) and the lowest at 1.76% (Alaska). Sales taxes are known to be a regressive tax, that is, low- and middle-income people are paying a greater portion of their income than the wealthiest in the state. Let’s say someone is going to the store to buy toilet paper, shampoo, and laundry detergent. This simple narrative stays almost consistent across socioeconomic classes (as there are still some who cannot afford these items). According to a 2009 study by the Institute on Taxation and Economic Policy, in Nevada the top 10 percent are only paying 1.6 percent of their income to get these items, while the poorest 20 percent pay 8.9 percent of their income for these same items. Those numbers can only be higher now as we have seen sales taxes go up in recent years.
Unfortunately, the sales tax generates the most revenue for the state at 79.1% in 2016, so if we were to lower or get rid of it, lawmakers would need to find new alternatives for revenue. But, why have they decided to place the burden of generating the majority of state’s funds on the backs of poor people? Instead of relieving working families, we continue to give tax breaks to the biggest and wealthiest industries in the state- mining and gaming. The wealthiest evade paying their fair share of taxes with a low property tax rate and the absence of the state income tax. In addition, the cap on business taxes only further helps the large gaming industry, while hurting small businesses whose tax relief could be larger if only the big, wealthy businesses paid more.
Nevada is long overdue for reforming a tax system that was set up by the greedy mining, banking and railroad industries that have previously-dominated or continue to dominate our state legislature. We are also long overdue for a legislature that pays legislators a dignified salary for the hard work they do. No wonder our tax system only relieves the rich and big; they are the only ones who could afford to not work six months of the year to set it all up.
Opinions expressed in The Nevada Sagebrush are solely those of the author and do not necessarily express the views of The Sagebrush or of its staff. Katie Worrall studies political science and international affairs. She can be reached at rsuppe.sagebrush.unr.edu and on Twitter @NevadaSagebrush.