Legislative Bank Robbers
Inside Liberty Watch Today - February 6, 2007
Bank robbers in Las Vegas are hard to understand. Why on earth would someone go to trouble of going into a bank branch, wave a gun around for a dozen surveillance cameras to record for posterity, and then have to make a hasty getaway, dodging traffic, all for a lousy thousand bucks or so.
If a person is going to make crime and thievery their career, then why shouldn't that person balance risk and reward? Thieves take the obvious risk of having to spend jail time in stark conditions amongst relatively unsavory characters should they be caught. Thus, they should seek out targets that offer the greatest financial reward should their capers be executed successfully.
Banks do not provide such targets in Nevada. Casinos do.
But like underachieving bank robbers, members of the 2003 Legislature, decided in the 11th hour to jump the teller line like some hyped-up methamphetamine addict and stick up the banks with a yearly per branch tax of $7,000 and a 2 percent charge on bank payrolls.
In the grand scheme of things, now that the state's budget has grown to $7 billion, the bank branch tax is a drop in a seemingly bottomless state budget bucket. So, new governor Jim Gibbons singled out the branch tax in his State of the State speech for expulsion (along with lowering the payroll tax for all businesses except banks).
Of course one would expect the Dina Tituses of the world to call the proposed tax cut a "give away" to bankers. The more rabid Democrats do tend to believe all money is the government's, with any money that businesses and individuals are left with to keep being "giveaways" and "loopholes."
Interestingly, Stephens Media Group's Las Vegas (anti-)Business Press editor Ian Mylchreest is sympathetic to the cries of these Democrats. In his weekly Viewpoint column entitled "Bank tax repeal not a done deal," Mylchreest parrots all the old wives' tales Titus and others spouted back in '03 about how banks make billions in profits in Nevada while not paying a fair share. He even repeats the Titus whopper "that banks in Nevada earned $12 billion in profits."
Back in 2003, Barbara Buckley was quoted as saying that she was told that banks earn $10 billion a year in Nevada. After the legislative session ended a banker called Buckley and queried her about the statement and told her that she was way off to the high side. She didn't care-"bankers must pay more," she reportedly said.
Editor Mylchreest scribbles with the same lack of knowledge or reasoning, writing that banks do "little but siphon profits out of Nevada. At least restaurants, retail and construction provided plenty of employment." Evidently that's not completely true, according to Federal Deposit Insurance Corporation (FDIC) statistics as of September 30, 2006, the 35 state-chartered Nevada banks employed 7,940 full-time employees. These employees helped generate combined profits for their employers of $1.7 billion through nine months. Not quite the $10 or $12 billion Titus and Buckley were leading people to believe. By the way, for comparisons sake, Nevada casinos won $1.4 billion in the one month of November 2006 alone.
And what about those bank jobs? Nevada politicians are always crying for more diversification and more white-collar jobs. Back when there were hearings after the bank taxes were implemented, Mark Daigle from Colonial Bank argued that the taxes levied on banks by the 2003 Legislature were unfair in relation to the taxes levied on other businesses in the state.
The two percent payroll tax on banks is three times greater than the .65 percent assessed other businesses, which of course is unfair. But, as Daigle pointed out it gets worse. Using 2001 numbers that were available to the Legislature in 2003, banks pay an average salary of $42,242. The average salary for other industries is $33,122. So, even if the rates were the same, the bank payroll tax would be 27 percent higher than that on other businesses. But, given the tax rate difference, the banks pay nearly $845 per employee, nearly four times the $215.29 per average employee that other businesses pay.
Mylchreest believes Democrats "have to take a stand on [the bank branch tax] or else prove how hallow their words were in 2003." He foresees tough sledding for bankers and the Governor "unless the Democrats are going to surrender the ground they fought so doggedly to win in 2003."
It's galling that the editor of a business weekly would champion the cause of increasing taxes on any business. But, his pep talk for Buckley and Titus to hold their ground, like they did something heroic back in 2003 is especially revolting.
They are no more heroic than the petty bank robber who steals to satisfy a fix.
Doug French, Liberty Watch Columnist
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