Is Nevada's Tax System Putting the Screws to Banks?

Lobbyists for the banking industry are arguing that one feature of Nevada's 2003 tax hikes on businesses-- which imposes a higher payroll tax rate on banks than on other companies--unfairly singles out the banking industry and should be repealed.

A line of bankers and banking lobbyists decried that they must pay the 2 percent tax on their payrolls, while other businesses pay a 0.65 percent payroll tax rate. That rate temporarily was reduced to 0.63 percent in 2005, but will return to the 0.65 percent rate unless legislators make changes this year. Gov. Jim Gibbons has proposed making the rate 0.62 percent for nonbanking businesses.

There could be a good rationale for taxing banks at a higher rate than other forms of business. But what's interesting is that we're not really hearing any such rationale from defenders of the higher rate-- unless you count "we need the money" as a good rationale:

Jane Gilbert, a lobbyist for the Progressive Leadership Alliance of Nevada... contended that the $44 million the tax produces could be used for human services and education. Nevada State Education Association Executive Director Terry Hickman echoed Gilbert's comments. Hickman mentioned that a legislative-commissioned study found the state needs to spend $1 billion more on education. "It is time to invest in public education, not to take away resources," he said.

And that's fine. Adequacy is a terrific thing, and you can make a strong case that Nevada is not adequately funding plenty of important services. But the salient question here is why imposing a higher tax rate on banks makes any sense from a tax policy perspective. And no one seems to be offering a sensible explanation of this.
Anyone?