The Tax Foundation in Washington D.C. released their report on how Nebraska should adjust the 50 year old tax code to better fit the 21st century. Spokesperson Jared Walczak says Nebraska’s tax system dates back to 1968 and that isn’t a system that works for today’s growing and dynamic economy.
Walczak says Nebraska needs to broaden basis and lowering rates to create simplicity. He says, “Reducing some reliance on the corporate income tax. Reducing the incentives that are in there for select businesses to have a broader base, more neutral tax code and lower rates. Reducing individual personal property taxes and finally simplify the individual income tax. There is some sticker shock associated with that rate. There is some opportunity, especially if there were some sales tax broadening, to lower income tax for all for all taxpayers.”
Often times Nebraska offers big incentives to companies to locate here. Walczak says, “States are realizing that the best economic development incentive is a neutral tax code that does not pick winners and losers. The state itself tracks these and says we are essentially paying $76,000 for each job created. There is a lot you can do with that money. If it was placed in a neutral tax system, general tax relief, you could create a lot more jobs without picking those select winners.”
Walczak says the good news is there is a lot of interest among Nebraska senators and there have been recent discussions on tax reform.