GOV PROPOSES ENDING INCOME TAXES BY ENDING SALES TAX EXEMPTIONS

Posted 1 year ago

By John Axtell

Nebraska Governor Dave Heineman used his annual State of the State address to the legislature today to call for a massive overhaul of the state tax system by getting rid of individual and corporate income taxes and replacing the lost revenue by ending all sales tax exemptions for businesses.

Nebraska exempts more in sales taxes than it collects…bringing in $1.5-billion dollars annually while exempting $5-billion. Heineman said that’s more than enough to cover what would be lost by eliminating income taxes and an approach that’s drawn interest from business leaders during quiet discussions in recent months.

He said they want “simplicity and fairness…a modern tax code that rewards productivity, profits and job creation rather than having their lawyers and accountants spending time mining the tax code for exemptions.”  Heineman sees his proposal as benefitting working and retired Nebraskans while growing the State’s economy by helping small businesses prosper.

The governor offered statistics to back his proposal…pointing out that Nebraska’s Tax Foundation Business Tax Climate Ranking is 31st out of the 50 states, which he called “mediocre, at best” while its top personal income tax rate is 35th of 50 states; and is higher than all neighboring states…with Wyoming and South Dakota having no individual income tax.

Heineman said he will introduce several options for lawmakers in the next few days, but did not specify which tax breaks he wants to eliminate. He did emphasize that he would not support taxing food, not even with some type of low-income exemption or rebate program.

Governor Heineman and Lt Governor Rick Sheehy headed out after the speech on separate trips to 13 cities across the state to highlight some of the governor’s proposals.

Heineman is flying to North Platte, Grand Island, and Norfolk today while Sheehy is going McCook, Sidney, Scottsbluff, and Alliance. Sheehy will visit Chadron, South Sioux City, Falls City, and Beatrice tomorrow.

Sheehy’s Panhandle schedule has him at the Western Nebraska Community College Aviation Campus in Sidney at 2:10, at the terminal in Scottsbluff at 3:30, and at the Alliance Airport Terminal at 4:45, and at the Best Western West Hills Inn conference room in Chadron tomorrow morning at 8:00.