Gov. Dave Heineman remains opposed to the inheritance tax, despite legislative resistance to the idea.
Heineman proposed elimination of the inheritance tax in his $316.6 million tax cut package proposed during the last legislative session. Nebraska counties collect the inheritance tax. County officials objected to its elimination, stating it has been used to pay for capital improvements and to build emergency funds. Legislators listened to the officials and removed the proposal from the package, which eventually was reduced to about a third of the original proposal and passed.
Heineman continues to press his case against the tax.
“The inheritance tax needs to be repealed. Nebraska is only one of eight states that still has one. We’re the only state in America where the funding actually goes to counties,” Heineman tells reporters. “It is bad public policy.”
Heineman argues that the inheritance tax makes Nebraska less competitive with other states. The governor has hinted that he might propose its elimination in the upcoming legislation session, but hasn’t confirmed it. Heineman and his staff have been working on their legislative package typically unveiled during the State of the State speech to the Unicameral in January.
The governor points out the state eliminated the Estate Tax and cut its budget to cope with the loss of $125 million a year. He says counties should simply tighten their belts to adjust to the loss of income.
Heineman says the tax hurts efforts to pass farms and small businesses down to the next generation as heirs struggle to pay the tax bill to keep the operation.
AUDIO: Brent Martin reports [:40]