Letters to the editor of the 3-14-2K Reno Gazette-Journal

From: Nanna R. Rassu

Todays Reno Gazette has a number of negative letters with misinformation. We all need to combat this kind of biased reporting now! His tax is 11%, not 80%, and is only on casinos making a profit of $1m a month! 45% of what they collect will go to schools---not mentioned. There are 5 other groups that get a lesser % of the tax. This kind of misinformation will be accepted by the general public as "gospel" truth. Pass the word around to everyone you know.


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The smoking gun---casino-planted letters to the editor

Dear Ms. Rassu:

Thanks for the support. I've made Sen. Neal aware your response.

Positioning the casino tax proposal as an 80% increase was announced in January by Nevada Resort Assn. chief Bill Bible as the focus of the industry campaign to kill the initiative petition. Sen. Neal, in his two TV debates with industry spokeswoman Jan Jones, pointed out that her employer, Harrah's, at its Detroit casino, pays a gross gaming tax 460% higher than they pay in Nevada.

Please keep in mind that Nevada does NOT tax casinos on profits (income left over after expenses), as the IRS does. Like other states, Nevada taxes *gross* revenue. The gaming tax comes off the top and is thus not be victimized by Hollywood-style accounting which tries to report zero net profits for tax purposes, e.g., taking as tax-deductible expenses Steve Wynn's posh homes and private jets also noted in the 3-14 Reno Gazette-Journal.

As I wrote in my Reno News & Review column of 2-10-2K, "Trumping the Donald," the Eldorado and Silver Legacy NET PROFIT (after expenses) is, conservatively calculated, about $72 million per year. Imagine what their gross volume must be to generate such huge profits.

As Sen. Neal has pointed out many times, other states force casinos to publicly disclose their financial data. In Nevada, the industry has pushed adoption of secrecy laws so that no casino has to disclose its actual gross. Net profits, like the above, can be calculated using property tax data. Casino property taxes are based on their net profits.

Sen Neal's initiative will affect only the largest operations in Reno-Sparks: the Nugget, Harrah's, Cal-Neva, Eldorado/SilverLeg/Circus, Hilton, et al. Only big clubs in Washoe, Clark and Douglas counties will fall under the new structure.

The letters in the 3-14 Gazette-Journal were obviously part of the industry's organized campaign. Three of the four used the 80% number.

I especially like this passage in the letter from one Bev Davis of Reno: "How does he (Neal) expect a casino to continue to pay its expenses, to provide a living wage and benefits for its employees?"

The problem is that casinos DON'T pay living wages to many of their workers. The Nevada Commission on Economic Development study, accessible from the front page of JoeNeal.org, shows how low-wage casino jobs drive up taxes through government spending to pick up the slack. Reno's St. Vincent's Dining Room feeds a lot of full time casino workers every day and has done so for many years.

In a recent interview with the Las Vegas Review-Journal, accessible from both JoeNeal.org and NevadaLabor.com, former Sen. Paul Laxalt, R-Nev., decried the proliferation of low-wage gambling jobs.

Ms. Davis adds "smaller casinos would really be devastated as some of these struggle to stay in business today." The smaller ones would not be affected and would continue to pay taxes as they currently do at the lowest rates in the world.

For any given month, Nevada casinos owe taxes according to this schedule:

0-$50,000, 3%
$50,001-$134,000, 4%
More than $134,000, 6-1/4%

The above progressive structure, unchanged since the 1980s, currently yields an effective tax rate of about 6.2%, easily the lowest in the world. Sen. Neal proposes a fourth tier. Income from $134,000 to $1 million would remain taxed at 6-1/4%, but income above $1 million per month would be taxed at 11-1/4%. It would affect 107 casinos in three counties: Clark (Las Vegas); Washoe (Reno-Sparks) and Douglas (S. Lake Tahoe).

Sen. Neal proposed a two percent increase during the 1999 legislative session. Sen. Bill Raggio, R-Reno, recommended that gambling industry lobbyists discuss the matter with Sen. Neal, D-North Las Vegas. The industry refused and ordered the bill assassinated. If 2 percentage points were too much last year and a 5 point increase is too much now, what's fair? Please note that Nevada communities statewide are raising property taxes and pushing special taxes to pay for growth. You'll find news stories about them linked at JoeNeal.org.

Rumor has it that the industry is going to put out its own study showing that it is paying its fair share. I hope they send a copy to Gov. Guinn and Lt. Gov Hunt whose Commission on Economic Development study does not agree.

Thanks for your interest.

Be well. Raise hell.

Andrew Barbano

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