LAS VEGAS (3-2-98) - Las Vegas television viewers voted by a wide
margin Monday night to endorse Sen. Joe Neal's call for an increase in the
gross gaming tax for Nevada's largest hotel-casinos.
While Neal debated Mirage Hotel-Casino vice-president of public affairs Alan
Feldman, viewers called in their preferences. Almost seven in 10 supported
Neal's proposal. Sixty-nine percent favored an increase while 31 percent
registered opposition in the non-scientific survey conducted as part of KTV-63's
live "Nevada Issues" program.
"Casinos basically pay nothing in state taxes," Neal (D-North Las Vegas)
says. "Nevada gaming taxes are fully deductible on federal income tax returns.
"I'm just proposing that we keep more of the money here at home rather than
send it to Washington," the 26-year lawmaker said.
"Gaming doesn't pay its fair share," he added.
"The public pays for the costs of addiction and other gambling-related problems,"
Neal and Feldman heatedly discussed the contentious issue of tax breaks won
by the gambling industry during the 1997 legislative session.
Mirage CEO Steve Wynn stands to become the first beneficiary of a major loophole
passed last year. Mr. Wynn recently sold about $74 million in company stock.
The cash reportedly may go toward his personal purchase of expensive works
of art for display at his new Bellagio Resort, qualifying him for the tax
Sen. Neal opposed the loophole during the legislative session, arguing that
it would take millions from school children. He proposed increasing the tax
on the revenues of gambling houses which book more than $134,000 per month.
Gaming industry pressure killed the measure in the legislature.
This year, Neal has made it the cornerstone of his campaign for governor.
He favors a minimum two percent increase in the gross gaming tax for large
gambling properties. Linked with that, he proposes a major tax cut for all
businesses by wiping out the per-employee head tax, a major roadblock to
job creation, especially for small firms.
Neal's proposal would not affect small operators. Those grossing less than
$50,000 per month currently pay a three percent tax. Casinos generating between
$50,000 and $134,000 per month pay four percent. About three dozen major
operations gross more than $134,000 monthly and are subject to the top rate
of 6-1/4 percent which has not been raised in more than 10 years. Casinos
in other states pay as much as 34 percent of their gross for the privilege
of a gaming license.
Neal's proposed increase of two percent for large operators would divert
about $138.4 million per year from federal government coffers to the state
treasury. As the largest employers, gambling houses would benefit the most
from Neal's proposed elimination of the per-employee levy.
The conservative Nevada Policy Research Institute last month published a
comparison of state tax burdens. Figures from the Tax Foundation of Washington,
DC, ranked Nevada sixth in state and local taxes per capita for 1997.
"It's a myth that we are a low-tax state in which to live," Neal says. "Too
much of the tax burden is on the backs of the little people. My proposals
are a modest attempt to correct some of this inequity," he adds. Nevada stands
among just six states generating more than half of tax revenue from sales
taxes, according to 1996 figures from the Tax Foundation published in the
March 2, 1998, Reno Gazette-Journal.
"Sales taxes are the ultimate regressive levy," Neal says. "The less you
earn, the larger the percentage of your income which goes to taxes. Only
about a quarter of Nevada sales taxes are paid by tourists. The lion's share
comes from residents," Neal says.
A Las Vegas Review-Journal poll published last week showed Neal within 11
points statewide of GOP frontrunner Kenny Guinn. (Guinn leads 35-24 with
41 percent undecided and a margin of error of 3-1/2 percent in either direction.)
Neal announced his candidacy in January. Guinn has been campaigning full
time for two years and has amassed a $2.8 million war chest. In Clark County's
first congressional district, the race is a statistical dead heat with Guinn
at 29 percent, Neal at 28 (margin of error plus or minus five percent).
The gaming tax increase loses by eight points (42%-34%) statewide, according
to the Review-Journal poll. The newspaper has not published how the issue
fares in the Clark County congressional district where Neal runs strongest.