Taxes and The State of Nebraska
Tax reform, tax cuts, lagging revenues and the growth of the state will dominate the headlines coming from the State Capitol as the Nebraska Legislative Session runs its 90-day course. The Lincoln Chamber strives to be YOUR voice in the rotunda. In coalition with our partners at the State Chamber and the Greater Omaha Chamber, we will continue our push to adjust income tax rates in an effort to make our state more competitive for jobs and the talented people needed to fill them.
The letter highlighted below was co-authored by David Brown, Barry Kennedy and I. David is the president and CEO of the Greater Omaha Chamber and Barry is the president of the Nebraska Chamber of Commerce & Industry. It first appeared in the January 15 edition of the Omaha World Herald.
By Wendy Birdsall, David G. Brown and Barry Kennedy
The hard truth is Nebraska is a high-tax state.
These are the facts:
Nebraska’s top income tax rate for individuals is 15th highest in the country.
Our state’s corporate tax is 16th highest.
Nebraska’s combined state-local average sales tax rate is 25th highest.
Our local property taxes are 13th highest in a recent comparison by the U.S. Census Bureau.
Something has to change. And with tax reform once again a key focus in the Nebraska Legislature, this year presents an opportunity to achieve that change.
The Greater Omaha Chamber, the Lincoln Chamber of Commerce and the Nebraska Chamber of Commerce & Industry believe the best way to accomplish growth in tax revenue is to do a better job of growing business activity, which in turn will attract more investment, increase population, grow jobs and boost quality of life. We can do all of this by creating a more competitive business environment.
Our current tax structure is a disincentive to new investment; to the transfer of ownership of businesses and farms; to retirees to stay here; to young people who want to live in our state.
That is why, with a united voice representing Nebraska’s business community, we are advocating for a significant reduction of state income tax rates. This is the tax reform that many experts consider to be the key to competitiveness, to ensure a healthy, diversified economy.
While the Legislature has concentrated on property taxes for the past several years – allocating more than $200 million annually in the form of property tax credits – true property tax relief will never be realized until serious fiscal restraint is practiced locally, especially by K-12 school districts, counties, cities and other property-taxing entities. This will take political courage at the local level and more stringent oversight by taxpayers.
We also encourage continued efforts to control the growth of state government spending, and we commend the governor and Legislature for their fiscal restraint in the last biennium.
While tax reform is never easy, there has already been substantive work done on this issue. We look forward to working with the Revenue Committee chair, State Sen. Jim Smith, and with Gov. Pete Ricketts as they continue to consider ways to create a more competitive income tax environment for businesses and individuals in Nebraska.
Also, we strongly urge policymakers to avoid shifting the tax burden by using state dollars to subsidize local taxes. Tax shifts have been tried in the past and have always failed to lower the local tax burden over the long term. Moreover, tax shifts diminish transparency and lessen local accountability.
We know that accomplishing true tax reform will be a challenge in this year of budget concerns. Nonetheless, there has been no better time to forge a more competitive tax structure that will help the citizens and businesses of Nebraska thrive for years to come.
Changing the way the State does business will be an arduous task. The Lincoln Chamber is committed to representing your interests every day. Together, as a united business front, we have an opportunity to accomplish lasting reforms that will grow our state. We look forward to serving your needs by lowering the burdens placed upon your business.
The Chamber’s mission is to improve the lives of Lincoln residents by providing increased economic opportunity and can only be accomplished together. For more information on the Lincoln Chamber of Commerce, (www.lcoc.com) please contact Jaime Henning at email@example.com.