Gov. Dave Heineman has made his pitch to drastically change the state tax system during a legislative public hearing on his proposal to eliminate the state income tax.
Heineman testified before the Legislature’s Revenue Committee, part of the committee’s lengthy hearing on LB 405. The bill carries the governor’s proposal to eliminate the state individual and corporate income tax. To offset the loss of revenue to the state, the bill proposes eliminating $2.4 billion in sales tax exemptions.
In response to a question from a committee member, Heineman outlined his tax philosophy.
“Low rates, few exemptions, don’t favor one industry over another and a tax policy that promotes economic growth, that spurs economic activity,” Heineman stated, adding that the system also would need to generate the revenue to pay for state programs and services.
Heineman contended getting rid of the state income tax would improve the Nebraska economy.
“I don’t think that you can get away from the fact, right now in 2013, the fastest growing states are those states with a low or no income tax.”
Heineman acknowledged during his testimony before the Revenue Committee that his proposal would be a drastic change, but he urged committee members to consider the alternative of doing nothing.
“It is a risk, a significant risk not to change,” according to Heineman. “If we don’t change, then we better be prepared to understand what we’re saying; we think the current tax system is the best we can do.”
AUDIO: Gov. Dave Heineman testifies before the Revenue Committee on LB 405. [1 hour, 17 minutes]
