Unprepared food is not taxed in the Silver State, but it is not remotely accurate to claim that Nevadans with modest incomes seldom encounter the sales tax. In a lengthy media release which outlined his objections to the quarter-cent hike in Clark County, Assemblyman Harry Mortenson observed that the sales tax is applied to many necessities, including diapers, automobiles, soap, shoes, school supplies, toilet paper, clothing and appliances. Nevada, almost alone among the states, levies its sales tax on many medical necessities. These hikes have taken their toll. Last year a District of Columbia study examined the tax burdens of the largest cities in each of the 50 states.
Many government officials claim that tourists cover a heavy chunk of Nevada's sales tax bill.
The sales tax already accounts for a greater share of Nevada's general fund than taxes collected from casinos. Tourists contribute far less to the economies outside of Nevada's two population centers, yet most residents of rural Nevada face only a marginally smaller sales tax burden than those in the Las Vegas and Reno metropolitan areas. For years, free-market proponents have amassed evidence that lowering taxes produces greater economic activity. Thus, cutting taxes rather than raising them can often generate greater revenue for government. The effects of changes to the federal income tax clearly support this theory.