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 stated.
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 break.
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.
