Sandoval, Tesla and Mahal
by Vice President Knight Allen
Originally published on March 13, 2015 - reprinted with permission
By the time you read this Governor Sandoval will have introduced his $250 million dollar business
license fee increase to the legislature. All you need to know is that this proposal, along with all
other business revenue taxes, are not paid by the businesses. They are paid by us. Businesses don't
pay taxes. They build taxes into their cost structure, collect the money and send it in to whatever
government body has levied the tax. It's simple. It's clean and it's one of the primary reasons the
rich get richer and the middle class keeps getting squeezed. It's why there are no working people on
the Forbes list of the richest people. They are all capitalists. They all have their wealth safely
locked up inside the corporate structure where it can grow and compound tax free year after year and
decade after decade despite the fact the United States has the highest corporate tax rate in the world.
The Governor's proposal violates the core Principle of Taxation: "Do not tax the necessities of
life." and it’s Corollary: Businesses do not pay taxes – Adam Smith "Wealth of Nations."
His proposal is a tax on food, medicine, rent and utilities. It strikes at us in every area of
our lives where we must function just to survive and no one in authority seems to care. Even the
"No taxes!" crew can't articulate why the Governor's proposal is so bad.
The vast majority of our legislators are decent people who care about Nevada's future but that's
not good enough. It's imperative they know what the rules are and that they abide by them. This
is particularly true when it comes to taxation which is the most dangerous and potentially
destructive of all government powers.
Did you see Tesla's last quarterly report? They lost $107.6 million vs. a $16.3 million loss a
year earlier. Their free cash flow was negative $455.1 million and their cash reserves dropped
to $1.91 billion from $2.27 billion at the end of the previous quarter. Wall Street has gotten
a bit antsy taking the stock down about thirty percent since its high last August. A few more
quarters like this one and those billion dollars in corporate welfare we handed out could start
looking a little shaky.
It was Sunday morning 1/18 and I was just getting ready to go out the door when the phone rang.
On the other end was Ken Mahal's son Kevin who said he was calling from Ken's hospice room.
Needless to say that one word, "hospice" turned my day around pretty quick. I had talked to
Kevin before and he had made it clear that Ken was not doing well but hospice is obviously a
whole different level.
Ken couldn't talk very well but he could hear and understand me fine
and with Kevin acting as translator Ken and I talked for quite a while. We talked about nothing;
we talked about everything. It was one of the most special conversations of my life and I will
always remember it with gratitude and deep positive emotion.
see Ken's Obituary on the Member's Page >>>]-webmaster
I'd like to close with my favorite Ken Mahal story which, by the way, has nothing to do with
Ken and I both had management experience. His, as CEO of a large and successful corporation was
multiple times deeper than mine and my five million dollar three employee accounts receivable
department. It turned out our management approaches were poles apart in every aspect. We'd go
'round and 'round never agreeing on anything but having a ton of laughs in the process.
One time he related to me how he handled an employee who had fouled something up. As he told me
how he had put the guy through the ringer I could only shake my head. When he was finished I said:
"Man, I'd never go to work for you."
Without missing a beat he shot back:
"Don't worry about it. I'd never hire you."
Baddabing! Last word to Ken.
Rest well my friend.
Vice-President Knight Allen
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