Let?s make a deal. What?ll it take to get you to close the deal? A little wheeling? A little dealing? A little quid pro quo? Pay no attention to the price tag. That?s for the suckers.
After a meeting of the Governor?s Office of Economic Development (GOED) this past week, the agency put out a press release boasting that it had approved ?the creation of thousands of new jobs in Nevada through the expansion of existing Nevada companies, and companies that are moving to the state.?
GOED Director Steve Hill positively crowed, ?We continue to see extraordinary businesses show interest in Nevada for a myriad of reasons, including location, available incentives, business friendliness and the quality of life. These companies will add to the gaining strength of our economy by creating thousands of jobs for Nevadans and continuing the narrative that Nevada is a great state in which to do business.?
Nowhere in the press release did it ever state what those ?incentives? were. The word ?tax? was nowhere to be seen.
Yet, in one meeting alone the agency magnanimously doled out a total of more than $6 million in tax abatements over the next 10 years to six different companies ? five in Clark County, one in Washoe and none anywhere else in the state.
Apparently based on a strict mathematical calculation commonly known as a whim, the companies had their sales taxes slashed to a mere 2 percent for two years ? instead of nearer 8 percent for those not so privileged ? and their property and modified business taxes are being cut by either 25 percent or 50 percent for several years ? depending on how good a deal each could wrangle.
The biggest tax forgiveness packages went to the multi-billion-dollar Internet marketer Amazon ? $1.8 million ? and something called TH Foods ? $2.2 million.
There seemed to be little rhyme nor reason for the size of the largess in comparison to the relative benefit to the state and those taxpayers still required to pay the going rate. You know, the sticker price.
The numbers crunchers claimed one company would generate more than $68 in additional tax revenue for the state for every dollar of abatement, but another would generate only $2.50 for each tax dollar forgiven. Of course, that is pure speculation and conjecture.
Even though one of the stated reasons in the law creating such tax abatement incentives is to create high-wage jobs, only two of the companies so favored last week said their average hourly wages would exceed the targeted statewide average of $21.35 an hour and two companies reported their wages would be less than $15 an hour ? one of those Amazon.
This wheeling and dealing was done despite the fact the Nevada Constitution clearly states, ?The Legislature shall provide by law for a uniform and equal rate of assessment and taxation ?? It ain?t uniform or equal if a select few get breaks while others don?t.
And pay no never mind to that part of the Constitution known as the Gift Clause, which states, ?The State shall not donate or loan money, or its credit, subscribe to or be, interested in the Stock of any company, association, or corporation, except corporations formed for educational or charitable purposes.?
Remember, that $6 million in tax breaks was from one single meeting of the ever so generous GEOD, which has already doled out billions of dollars in tax ?incentives? to Apple, Tesla Motors, Faraday Future and countless other billionaires.
Hey, no peeking behind the curtain at the fact the 2015 Legislature just raised taxes by $1.5 billion on all of us who are too insignificant or too timid to cut special deals, nor at the fact the state is already running a budget deficit of $400 million.
For that $6 million in tax abatements this past week, the companies claimed they might create as many as 2,000 jobs.
In 2012 alone small businesses in Nevada created 15,000 jobs without asking for any tax abatements or credits. What does that make them? Rubes? Suckers? ? TM