State Supreme Court forces lawmakers to take a stand on taxes

The Branch of Inaction now has no choice but to take action.

After decades of quarter-measures and half-promises, the Legislature must finally take a stand on a business tax. And in forcing the Gang of 63 to stand up or roll over, the the state Supreme Court has ushered in what is sure to be a battle royale not seen in 10 years, not since the dreaded gross receipts tax was immolated in a bonfire of ineptitude, fear-mongering and cowardice.

This is like a sequel that has all the potential to be as good or better than the original. "Die Hard II." "The Godfather II." "Aliens."

You get the picture, but without the literal violence, only the murder of facts by two sides wielding apocalyptic rhetoric about what will happen if they don’t win. The prospect both enervates and exhilarates; the deflating reality that the inane rhetoric already has begun combined with the exciting possibility that they just might do….something

I have already said, with no small amount of prescience (or modesty) that this would follow a predictable progression and that while I abhor the initiative process for substantive policy questions, I understand the teachers’ frustration with the Branch of Inaction. So let’s get the déjà vu part out of the way first, folks, on the consequences of this proposal to marginally tax businesses that take in $1 million a year to raise $800 million a year for education, provoking almost identical arguments on both sides that the gross receipts tax did 10 years ago.

Oh, how I can’t wait for the teachers union to tell me how this is all about the kids, for NPRI, Keystone and the Chamber and their ilk to paint pictures of businesses firing employees and for the casinos to try to figure out what’s worse – this tax or a bump in gross gaming because their revenue streams have changed so much since the last fight. Oh, the humanity!

And caught in the middle: The not-so-brave, if history is a guide, Gang of 63, which took two special sessions 10 years ago to cobble together a taxapalooza minus the gross receipts tax but packed with bad policy choices, especially a payroll tax that even Democrats say should be phased out.

The Branch of Inaction is not the crucible that usually produces much more than timid talk and mushy outcomes. But thanks to the high court that two years ago impelled the governor and lawmakers to make a decision on revenue with an eleventh-hour decision, the Gang of 63 and Brian Sandoval will have to consider the margins tax. At least this year, the high court had better timing, but once again has set the contours for a debate that should have occurred a long time ago.

I would hope that this one will not be reduced to the simplistic, obnoxious debates of the past. You are for education or you are against it. You want to destroy the economy or you want to save it. But Carson City is a place where hope goes to die because 63 citizen legislators, many of them well intentioned, are overwhelmed by a lobbying barrage that makes inaction easier than action.

I reserve the right to hope, though, because 1. The session hasn’t started; 2. The new leaders are talking about having a serious discussion at the beginning and not the end (their timing may be better, too); and 3. If the recession has taught us anything, it is that Nevada suffered disproportionately because we have such a narrow tax base.

But if the capital suffocates optimism, it often has the same asphyxiating effect on real policy debates. That’s what happened in 2003. Will we see the Branch of Inaction a decade later, too?

The political overlay could not be more different -- and it is reason for much pessimism.

GOP Gov. Kenny Guinn, safely re-elected, proposed the tax plan; GOP Gov. Brian Sandoval, facing re-election, already is against it.

Guinn had a key ally in the GOP state Senate leader, Bill Raggio; this year, the ambitious Michael Roberson is against the margins levy, already calling it (risibly, I might add) a “state income tax.”

Gaming pushed the gross receipts tax with all of its might; the industry’s muscle has atrophied a bit, and it has split over this idea.

The teachers union was much more popular within Democratic legislative circles in 2003; in 2013, the group is more of a lone wolf, having lacerated some of its allies with a post-Session ’11 scorecard.

That notwithstanding, I repeat what I have said before: This is all about just how serious the Democrats are about addressing the tax structure, and whether they can look beyond the potential electoral consequences next year if they embrace the teachers plan or an alternative.

Conventional wisdom is the Branch of Inaction will dither during the 40 days they have to consider the initiative, then punt it to the ballot. But if they are serious – or at least more serious than 2011 when they proposed a margins tax that they knew was stillborn right before the session ended – they will thoughtfully consider the new version before deciding whether to endorse it or reject it in favor of something else.

Speaker Marilyn Kirkpatrick and Senate Majority Leader Mo Denis keep talking about having the discussion starting next week. Fine.

But at some point – about 40 days in – the talk will have to be replaced by action. And we will know by then if the Democrats who only two years ago lauded the margins tax as the way to expand the tax base are interested more in headlines and preserving their majority or seriously trying to cobble together a veto-proof, two-thirds coalition in each house to make Sandoval what Guinn foolishly said lawmakers would be in 2003 if they didn’t get on board: irrelevant.