Nebraska tax hearing background
LINCOLN–The Tax Modernization Committee, comprised of 14 senators, has been traveling across the state gauging taxpayers’ concerns. Headed by Kearney Sen. Galen Hadley, the committee was formed after Gov. Dave Heineman’s proposed tax plan earlier this year proved to be a non-starter.
Ten months ago during his State of the State address, the governor called for eliminating the state income tax and making other changes intended to make Nebraska’s taxes more attractive to businesses.
“Our current tax system needs to be modernized and reformed,” Heineman said during the address. “It’s been nearly five decades since Nebraska had a serious debate about our overall tax system. Life has changed drastically since the 1960s, when we were operating in a completely different economic environment.”
Two days later, Omaha Sens. Beau McCoy and Brad Ashford introduced the bills implementing Heineman’s goals.
The bills, LB405 and 406, would have eliminated the income tax and removed certain tax exemptions. These exemptions ranged from newspapers to prepared food. The overwhelming response was “not my exemption.”
The hearings that followed lasted more than 15 hours combined and the majority of testimony was overwhelmingly against the plan. Sens. Hadley and Paul Schumacher of Columbus then introduced bills to further discussion over tax policy. LB613 started the ball rolling on the Tax Modernization Committee.
“LB 613 is the perfect vehicle to take back control,” Renee Fry, director of Open Sky Policy Institute, said. “Tax policy is extremely complicated; when you make a change to one tax there will be an effect that needs to studied and understood.”
With its hearings wrapped up, the Tax Modernization Committee is expected to issue a report before the Legislature reconvenes in January.
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