Hatfields and McCoys. Republicans and Democrats. Wolf Pack fans and Rebel fans. Libertarians and other libertarians.
Libertarians and taxation, to put it mildly, don’t get along. If a service is worth providing, why not let people provide it voluntarily, through private charity or the free market, instead of forcing people to pay for it? The answer, I’m loathe to admit, is that there’s a difference between market demand and political demand.
For example, there’s not much market demand for teaching children at Sunrise Acres — many of the parents of the children enrolled there barely have money for housing and food, much less private education — but there’s a growing political demand to avoid having hundreds of thousands of functionally illiterate adult Nevadans if we can at all help it. Even acknowledging that, though, the efficacy of government-provided education — especially in Clark County — demands some skepticism. Calls for more school funding, for example, would be more persuasive if the money actually went to the schools that most needed it instead of already-flush suburban schools with more experienced teachers.
Given that, when a tax break comes on the ballot, it’s almost obligatory to reflexively support it. The key word, however, is almost. Despite what Murray Rothbard thought, not all tax breaks are created equal. Some tax breaks are clearly the product of a broken, corrupt political process, one designed to reward winners at the cost of the rest of us. They deserve principled opposition. This is especially true when those tax breaks benefit a few politically connected people and/or businesses but encourage higher taxes on everyone else to make up the difference. A tax break on domestically produced air conditioner manufacturers, for example, is nothing to cheer for when it’s passed along with a nationwide tax on imported goods (writes the author on his Chinese-made HP laptop from the back of his Mexican-manufactured Mazda). A tax break for a politically connected electric car manufacturer, similarly, is nothing to cheer for when it not only demands increased services from its county government but also contributes nothing towards the costs for those services.
This brings me to ballot Questions 2 and 4.
Both ballot measures exist because of a longstanding quirk in Nevada sales tax law. In 1956, voters passed Question 8, which elevated the Sales and Use Tax Act of 1955 from an act of the Legislature to a referendum of the voters. Per Article 19 of the Nevada Constitution, any statute passed by a majority of the voters in a referendum “shall stand as the law of the state and shall not be amended, annulled, repealed, set aside, suspended or in any way made inoperative except by the direct vote of the people.” Consequently, changes to the Sales and Use Tax Act, including changing the list of exemptions from the tax, require a referendum.
Originally, mining proceeds, motor vehicle and heating fuels, food animals and their feed, meals served at schools, empty containers or containers containing non-taxable goods, utilities, public works projects, occasional sales (yard sales, for example), goods sold by the government or charitable organizations, goods sold or shipped out-of-state, and — crucially — newspapers and periodicals were all exempt. Unfortunately, in 1970, the voters voted against their own interests and removed the tax exemption from newspapers and periodicals, though they also added an exemption for prescription medication. In 1979, voters added food to the list, minus alcoholic beverages, pet food, tonics and vitamins, and prepared food intended for immediate consumption (This means gas station hot dogs are taxed, which affects me on a deep and personal level.). Since then, the list of exemptions has been altered periodically. In 1996, for example, three separate exemptions were considered, of which two (exemptions for certain medical equipment, including bandages and pads, and items sold by non-profit organizations) passed resoundingly. Question 2 seeks to add feminine hygiene products to the list, while Question 4 seeks to add tax-exempt medical equipment.
Question 2 is easy to support — in fact, the Libertarian Party of Nevada testified in support of both Senate Bill 415 and Assembly Bill 402, which placed Question 2 on the ballot. Like the tax exemption for food, it’s an exemption that is applied widely for a necessity. Unless your definition of “a few politically connected people” is wide enough to include “Nevada’s women and the parents and caregivers of Nevada’s daughters,” it’s impossible to argue that the tax exemptions enabled by Question 2 fall in the same category as, say, tax exemptions for electric car manufacturers.
Question 4 is a little harder to support, but only a little. Unlike Question 2, which amends the Sales and Use Tax Act, Question 4 amends the Nevada Constitution. As state Controller Ron Knecht pointed out the last time this measure reached the ballot, this ordinarily isn’t the correct place to put this kind of exemption. However, given that the Sales and Use Tax Act requires a public referendum to amend it anyway, the net effect is that repealing this exemption will require two voter referenda instead of just one if and only if the repeal is crafted by voter initiative; otherwise, removing or altering this exemption would require the same amount of procedural heft regardless of where it was located.
Consequentially, the procedural argument against Question 4 is far weaker than the procedural argument against Question 3, which means it can be considered on its merits — and its merits are sound. Medical care is a necessity. Medical care in Nevada is expensive enough as it is. It’s true that the number of Nevadans who might need oxygen tanks or a wheelchair is substantially smaller than the number of Nevadans who might need a tampon at any given point in time, but the Nevadans who need oxygen and wheelchairs don’t know they need them until they actually need them. Consequently, Question 4 is a tax exemption that can potentially benefit any of us.
Skepticism when considering voter referenda is usually well-warranted and strongly encouraged. If anything, Nevada’s voters should be more skeptical more often of the legislation we are asked to pass on our own behalf. On this year’s ballot, however, Nevadans have the opportunity to vote for two ballot measures that, if passed, will lead to tax exemptions that will directly benefit all of us. We should do so with neither fear nor reservation.
David Colborne has been active in the Libertarian Party for two decades. During that time, he has blogged intermittently on his personal blog, as well as the Libertarian Party of Nevada blog, and ran for office twice as a Libertarian candidate. He serves on the Executive Committee for both his state and county Libertarian Party chapters. He is the father of two sons and an IT professional. You can follow him on Twitter @ElectDavidC or email him at [email protected]