Socioeconomic impacts of the proposed federal gaming tax |
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Authors: | Robert Schmidt Charles F. Barr David A. Swanson |
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Affiliation: | 1. Integrated Research Group , 101 Veterans' Boulevard, Suite 900, Metairie, Louisana, 70005;2. Science Applications International Corporation , 101 Convention Center Drive, Suite 200, Las Vegas, Nevada, 89109;3. School of Urban And Public Affairs , Portland State University , Post Office Box 751, Portland, Oregon, 97207-0751 |
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Abstract: | We review the history of gaming and its taxation in the U.S., particularly in regard to the idea of “sin taxes” which were often presented as policy instruments intended to control problem gamblers. The review suggests that raising taxes neither encourages moderation nor replaces negative external costs. We follow the review with a socioeconomic impact analysis of a proposed four percent Federal Gaming Tax by simulating its impact on Clark County, Nevada for the period 1995-2004 using a large scale econometric multi-regional model. Clark County is of interest because it is where Las Vegas is located. The analysis reveals that the proposed tax would lead to a measurable decline in Clark County's jobs, population, disposable income, and total industrial during the forecast period. By 2004, total industrial output would be 1.3 percent lower under the proposed tax and Clark County would experience a loss of $1.39 in real disposable income for every gaming tax dollar collected by Federal Government. These reductions, coupled particularly with the loss of thousands of jobs in Las Vegas area hotels/casinos predicted by the analysis suggest that increased demands on social services in Clark County would result. These findings, together with the lack of evidence that raising taxes would promote moderation or reduce external negative costs, lead us to argue that excise taxes represent an unattractive option. |
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