Governor Dave Heineman proposed a major shift in Nebraska’s tax system this year — eliminating the income tax and replacing those dollars by expanding the sales tax.
The legislature rejected Heineman’s proposal and opted instead for a study of the state’s tax system, with a recommendation for the next session.
Senator Tyson Larson, of O’Neill, doesn’t like the make-up of the committee that will do the study.
“It would’ve been better if we’d had an outside group that could come in and analyze our tax system in a fashion that wouldn’t have senators involved,” Larson says. “That would have been better for the state as a whole to look at what each industry provides the state and what are the fair amount of taxes for those industries.”
Larson, a member of the Appropriations Committee, says he is concerned about more of a tax shift onto Nebraska’s agricultural producers.
“Farmers and ranchers pay a disproportionately high property tax but they get their tax breaks on the input side of it,” Larson says. “With senators themselves doing it, there’s going to be people trying to protect certain interests and I’m not sure we’ll get a lot out of the tax study.”
Larson says he would like to see the legislature consider a so-called “fair tax” proposal.
“It’s a system we need to look at, whether that’s the flat tax, which is something I’ve advocated for for a long time or if that’s a fair tax, which focuses more on sales tax, which I’m very open to as well,” Larson says. “If we can broaden the base and cut out the deductions, I think that’s something we should definitely look at.”
By Jerry Oster, WNAX, Yankton