From the man who brought you the Gross Receipts Tax
Inside Liberty Watch Today - Feb. 9, 2006

MGM MIRAGE chief Terry Lanni told Jon Ralston that he will support Jim Gibbons and only Gibbons for governor. "I have been very impressed with what Jim has been doing," Lanni said, reports Ralston. What Gibbons has done best lately is lay low and keep his trap shut. He wouldn't be caught dead in the same room with Bob Beers right now.

The simple thesis is that Lanni (or "The Chairman" as his adoring employees call him) is playing the odds that prohibitive favorite Gibbons will be moving into the Governor's mansion a year from now and he wants to back the winner. Fair enough, but beyond that, these two see eye-to-eye on plenty.

Lanni enjoys a cozy relationship with the culinary union and Gibbons' sympathies lie with the unions as well. You may remember that members of the Nevada Correctional Peace Officers Political Action Committee met with Gibbons last year and he assured them: "As Governor, he would NOT SUPPORT the return of privatization of any manner in Public Safety or Corrections Departments." Also, NCPO-PAC reports on its website: "While previously serving in the Nevada Legislature, Congressman Gibbons had a record of SUPPORTING COLLECTIVE BARGAINING for Correctional Employees." (Original emphasis)

Gibbons assured the Corrections officers that he is for: "The elimination of 'Salary Savings' positions within public Safety and Corrections to increase staffing," and the development of a voluntary 'On Call' department roster for Correctional Officer Retirees, to utilize in times of low staffing that would NOT affect the retiree's PER's benefits."

Mr. Lanni is all for increasing the size of government and Congressman Gibbons has dutifully voted in lockstep with the Bush Administration's largest increase in the federal government since LBJ.

Chairman Lanni spoke often in 2003 that taxes should be raised in Nevada and was one of the driving forces behind Kenny Guinn's proposed Gross Receipts Tax (GRT). But Lanni doesn't want gaming to pay for the government expansion he seeks. In 2004, the Gaming Wire reported that Lanni "said taxes are the issue that could kill the gaming industry, at least in specific states where legislators fail to understand the casino business."

Lanni told a standing room only crowd of 1,500 at the keynote session of the gaming expo that his company would focus all of its domestic investment and development plans on just Nevada, New Jersey and Mississippi. "They (all) have reasonable taxes and understand our industry," he said. "Our growth (and investment) is not going to be great in any other jurisdictions."

However, when it comes to small business, the MGM Chairman doesn't care if they survive in Nevada at all. In 2003, Lanni, while leading the charge for a Gross Receipts Tax, was quoted as saying, "if a business with $10 million in gross receipts can't pay $21,875 to support our schools, hospitals and senior centers, they shouldn't be doing business here in the first place; in fact they shouldn't be in business at all."

There is no question that the GRT would be a disaster for Nevada businesses and their employees. Washington State has had a GRT for almost 70 years, and it has made that state's tax system the most regressive in the nation. UNLV statistics show that the poorest 20 percent of Washington residents pay 14 percent of their incomes to that state government compared with the only two and one-half percent paid by the top one percent.

A businessman who owns a car dealership in Seattle, Washington, which has a B & O ("Business & Opportunity") tax similar to the GRT that Lanni proposed for Nevada, described the paperwork and recordkeeping to me in language that can't be printed here. In fact, he complained as much about the paperwork required as he did the six-figure monthly check he has to send to Olympia.

Big Business, Big Labor and Big Government have been joining together in America since what is known as the Progressive Era, 1900-1916. Gabriel Kolko, in The Triumph of Conservatism, labeled this corporatist alliance "political capitalism." Typically the progressive era is viewed as a time when numerous reforms were put into law to "regulate" business abuses. But Kolko shows it was actually "the leaders of big business and not the political reformers [who] became the chief initiators of the era's 'progressive' regulatory laws."

Lanni has been agitating for a "progressive era," in Nevada since 2003. He knows that a tax increase especially a gross receipts tax hits start-up and small businesses hardest. Sure, his company pays a lot of taxes but a quarter percent gross receipts tax may put marginal operators out of business. It will definitely prolong the time it takes a start-up business, casino or otherwise, to "hit the black," and it will likely stop a few potential competitors from getting in the business at all.

There have been whispers that Big Gaming will try again to implement a GRT in Nevada in the '07 legislature. Of course, the new governor will need to propose such a tax if the idea is to have a chance. Terry Lanni believes he has just the man for the job in Jim Gibbons.

Doug French, Liberty Watch Columnist