A long tradition
M
ichelle Howe-Stark owns a Sparks sandwich shop, Yellow Submarine. She knows what it takes to run a business, including taxation. So the notion that one industry’s taxes are capped by the Nevada Constitution doesn’t sit well with her. “That shouldn’t be a privilege for one,” she said. She’s not even sure that she would want that special treatment extended to the restaurant industry. “That’s a yes and a no,” she said. “It could go either way, depending on the taxation, what it’s for, where it’s going.” She’s not alone. Barbers, homebuilders, dry cleaners, jewelers, butchers, bakers, candlestick makers, all are on a level playing field with each other—and a lower field than mining. The Nevada Constitution caps the taxes of mining corporations at “a rate not to exceed 5 percent of the net proceeds.” It’s a tax loophole other industries would love. And the mining industry is working hard to keep it. In 2011, the Nevada Legislature approved a constitutional amendment to remove the mining tax cap. It must pass a second legislature to get on the ballot for voter approval. It would not raise or cut taxes, merely put mining on the same level with other industries. If the amendment is approved this year, the public would vote on it in 2014.
Nevada mining always considered itself a special case—as, indeed, more important than statehood itself. In 1863 it tried to get a good tax deal at the first Nevada constitutional convention. When it failed, it helped defeat the first constitution, delaying statehood. At the second constitutional convention in 1864, its supporters said that without mining, there was no Nevada. Delegate E.F. Dunne, a Humboldt County lawyer, said he opposed statehood altogether because it meant taxing mines. “I do not believe the mines should be taxed at all,” he said. He acknowledged that the farming areas of western Nevada would have to take up the slack of paying for public services if the mines did not pay. That was fine with him. “In reply to that, I ask, What is [agriculture] without the mines?” Delegate Neely Johnson, a Carson City lawyer and former California governor, responded. “You pay on more property than we, because you have more, but you are not willing to pay on all you possess, whilst you insist that we must pay on all we have.” His faction, he said, proposed that “all property shall be taxed equally.” This time, the mining corporations won. Their golden tax loophole capping mining taxes was placed in the proposed constitution, which was then approved by voters, and statehood went ahead. But mining was serious when it said it shouldn’t have to pay at all. Eventually it simply ignored its small Nevada tax. By refusing to pay their taxes, mining corporations headed by figures like John Mackay and James Fair starved the Storey County government and residents of the Comstock—and then loaned them money to deal with the emergency. Conditions on the Comstock were dire, and a relief committee was Michelle HoweStark formed. The corporaSparks merchant tions dragged the resulting court case out for years, took it all the way to the U.S. Supreme Court (Forbes vs. Gracey 1877) and lost. Then they refused to pay the penalties and started the whole process again. It lost that fight, too, but won enactment by the easily corruptible Nevada Legislature of deduction of a wide variety of mining costs—whereupon the companies’ dec-
“It should just be a fair share all around.”
“A SPECIAL CASE ” continued on page 14 OPINION
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NEWS
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GREEN
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FEATURE STORY
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ARTS&CULTURE
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IN ROTATION
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ART OF THE STATE
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FOODFINDS
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FILM
| MUSICBEAT
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NIGHTCLUBS/CASINOS
| THIS WEEK
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MISCELLANY
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MARCH 14, 2013
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RN&R
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