Nevada’s resort industry declined en masse to comment on corporate tax hike proposals, but other U.S. industries aren’t being so shy. (Photo by Ronda Churchill)
Nevada’s congressional Democrats, with the exception of Rep. Dina Titus, are keeping mum about Pres. Joe Biden’s proposal to raise the corporate tax rate to help pay for legislation designed to tackle poverty, boost working families, expand education and health care, and confront the climate crisis.
“Raising the corporate tax rate from 21% to 26.5% is the right thing to do to pay for long term investments in physical and human infrastructure.,” Titus said in a statement to the Current. “Many large corporations pay zero in taxes while others pay a lower rate than teachers and nurses. This is unfair. Besides, raising taxes on the wealthy and corporations is overwhelmingly popular with the American people.”
But the delegation’s senior member Tuesday was seeking additional relief for Nevada’s hospitality companies.
“While Nevada has seen a rise in leisure travel this year, business and international travel have still not returned to pre-pandemic levels, threatening Nevada’s economic recovery,” Sen. Catherine Cortez Masto said Tuesday during a Senate hearing with Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell.
According to a release from her office, Cortez Masto urged the officials “to ensure the Federal Reserve and the Administration are working together and doing everything they can to help the hospitality industry recover.”
“Senator Cortez Masto has led bipartisan efforts to help the hospitality industry recover from the coronavirus pandemic, securing much-needed flexibility for the gaming industry and delivering $750 million in funding for the Economic Development Administration to help states like Nevada that have been impacted by revenue loss in the tourism and travel industry,” the release said.
Cortez Masto, who faces a challenge next year from Republican candidate Adam Laxalt, did not respond to requests about her position on increasing the corporate tax rate on a resort industry that has yet to recover, as the administration has proposed in its legislation to spend $3.5 trillion over ten years to revamp social service programs, establish universal child care, expand and enhance education and health care, and address climate change.
The Biden administration’s proposed increase from 21% to 26.5% for the highest earning corporations is less than the 28% rate Biden originally sought, and much less than the 35% top rate before then-Pres. Donald Trump and congressional Republicans slashed it to 21% in 2017.
While members of the delegation were reluctant to discuss the tax component of the so-called reconciliation bill Democrats are trying to agree on this week — especially the prospect of higher corporate tax rates for Nevada’s resort industry, their staffs were eager to reminisce about the pandemic relief they delivered.
When the original CARES Act excluded small gaming businesses from receiving assistance, Rep. Dina Titus (D-NV) “had that changed so they would qualify for those lifelines,” said Titus’s spokesman Blake Williams. Titus, who faces a primary challenge from progressive Democrat Amy Vilela, declined to comment.
Can the hospitality industry, the backbone of Nevada’s economy, withstand a hike in the corporate tax rate now?
The Nevada Resort Association referred the Current to the American Gaming Association, which handles federal legislation for the industry. The AGA did not respond to requests for comment.
Fiscal analyst Jeremy Aguero, who made the case last year for gaming industry relief on behalf of the Nevada Resort Association, did not respond to a request for comment.
MGM Resorts International, which announced this week it’s purchasing the Cosmopolitan’s casino operations for $1.625 billion, the latest in a string of high-stakes trades on the Las Vegas Strip and, declined to comment.
A spokesman for Las Vegas Sands, the parent company of the Venetian and Palazzo, also declined to comment. The company entered into an agreement in March to sell its Las Vegas properties for $6.25 billion.
A spokesman for Wynn Las Vegas and Encore also declined to comment on the proposed increase in the corporate tax rate.
Caesars Entertainment did not respond to requests for comment.
Resort company employees stand to benefit significantly from the provisions of the corporate tax rate hike, which would help fund an overhaul of programs designed to give Americans financial breathing room, especially parents of small children struggling to pay the high cost of child care.
Nearly nine out of ten households would see a tax cut in 2022 under the Biden proposal, according to a report on FactCheck.org quoting the Tax Policy Center. By the tenth year, a quarter of households would see a decline in their tax bill.
While Nevada’s resort industry and its congressional delegation are reluctant to talk about raising taxes on corporations, some corporate interests in the country are decidedly less shy. The U.S. Chamber of Commerce and multiple industries, including tech firms and banks, are lobbying hard against the corporate tax rate increase.
And the Business Roundtable, a powerful association of CEO’s for the nation’s largest corporations, has been fighting the corporate tax rate hikes for months, and reiterated that opposition in a report Tuesday.
Nevada Democrats could be spared ever having to take a position on the corporate rate hike. A handful of congressional Democrats, notably Arizona Sen. Kyrsten Sinema and West Virginia’s Joe Manchin, have indicated they will not support raising corporate tax rates, at least not as much as the administration proposes. And in an even divided Senate and a very narrowly divided House, a handful of Democrats can wield an outsized influence on final legislation.
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