NEW TAXES

Surprise! Surprise! The RJ ran my Op-Ed piece on 5% Sales Tax on Advertising.

 

It is the Simple, Painless SOLUTION to a problem.

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Sunday, December 07, 2003

 

LETTER: A small tax on ads

Nation could raise billions

 

By KEN JARVIS

SPECIAL TO THE REVIEW-JOURNAL

 

Often, when the media are discussed, it is in the context of whether they are liberal or conservative. But what should be looked at is control. And the only thing all the media agree on? They don't talk about a sales tax on advertising -- even though a tiny 5 percent tax would bring in $30 billion a year nationally, well in excess of the tobacco settlement cash.

 

The only "cost" would be to divert 5 percent of ad budgets to the states in the form of a sales tax. We would be subjected to 5 percent less advertising.

 

How much would Nevada get? Hard to say. Nobody keeps records on advertising in specific states. Nevada has about 0.08 of the U.S. population, so if it got that percentage of the take, it would reap -- at a minimum -- $240 million per year.

 

The one thing this country has too much of is advertising. It is everywhere. The top 36 advertisers spend $80 billion-plus per year, according to Advertising Age figures. Not many people realize that the U.S. government is No. 24 on the list. In 2001, it spent $1.05 billion in tax money advertising. The question is not: What does it advertise? The question is: Why does it advertise? It spends twice what Wal-Mart spends.

 

I doubt if even most corporate officials realize there is no tax on advertising. I am sure that if they knew about the good a 5 percent federal tax would do, they would be for it. So who keeps the information from you?

 

I have talked to many people about the issue. I talked to Guy Hobbs when he headed the governor's Task Force on Tax Policy. He kept promising me he would bring it up, but he never did.

 

We should have a national goal of being the best nation in the world. Since we don't, we should have a goal for Nevada to be the best state in the union. How do we do that? Simple. We need to produce the smartest people. How do we do that? We educate them. So we need the best educators. How do we get the best educators? We pay them.

 

Nevada's share of the $30 billion would go a long way toward fixing the things that this state needs. The best place to start would be education. Would our children be better off with the 5 percent of the advertising money going to the schools or to pay for ads on the monorail?

 

If businesses are not paying their fair share of federal tax revenues, they are in essence receiving a form of subsidy -- so we are subsidizing advertising. When you watch ads on TV, read them in the Sunday paper, or listen to them on the radio, think about how 5 percent of the money spent to produce and place them could go to reduce your taxes.

 

Advertisers are an enormous special interest group. And the media don't want to bite the hand that feeds them. But this idea needs discussion. American will survive with 5 percent less advertising.

 

Kenneth H. Jarvis (LVKen7@peoplepc.com), an unsuccessful 2002 Republican candidate for the District 18 Assembly seat, writes from Las Vegas.

 

 

 

 

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