Senator Tom Brewer
43rd District
11-15-2019

There is a lot of discussion around the Nebraska Capitol about how to “balance” taxes. We hear a lot about the “three-legged stool” of income, sales, and property taxes. In Nebraska, the income tax leg of the stool is about 26 percent. Sales tax makes up about 30 percent. Property and “other” taxation make up the remaining 44 percent.

Some folks insist that reducing property taxes means being in favor of increasing sales and income taxes. But I favor another method: spending less money. I think our taxes are too high, and I want to lower them by controlling government spending, not by picking a different victim.

Property tax hurts farm families and ag businesses because it attacks the ground under their feet. Land is the most basic tool that ag needs to produce food, fiber, and fuel. Property tax affects farmers like a perpetual diploma tax would affect doctors and lawyers. It is a tax on the basic asset that allows them to be productive in their work.

Income tax hurts, too. Every dollar that is taken in income taxes is a dollar that could have been reinvested in a Nebraska enterprise. Raising income tax is not a cure for high property taxes. It is like taking blood out of the patient’s left arm just to transfuse it back into his right arm.

I think Nebraska would take off like a rocket ship if we got rid of the income tax and funded state-level operations with just sales taxes, letting the local units of government operate on property tax revenues with strict levy limits. We have had an income tax since 1967, and the results are in. Our corporate income tax rate is one of the highest in the country. This runs off businesses and discourages others from locating here. I think it is time to end this 52-year income tax experiment. Nebraska could join the other nine states that get along without an income tax. We are already neighbors with two of them: South Dakota and Wyoming.

There are many ways to do this that are fair; that don’t disproportionately hurt the poor; that don’t starve the state of needed revenue to fix our prison system, fix our roads and bridges, and properly fund public education. Nebraskans spend a lot of money on government, but that does not mean we are getting a better government. Senator Linehan has proposed a number of intriguing ways to deliver public education more effectively while better protecting the taxpayer. It is time we had these discussions. The life of our state depends on it.

Please contact my office with any comments, questions, or concerns. Email me at tbrewer@leg.ne.gov, mail a letter to Sen. Tom Brewer, Room #1423, P.O. Box 94604, Lincoln, NE 68509, or call us at (402) 471-2628.