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Like your new property taxes this year? I didn’t think so. I have received several calls and emails about the loss of the $10,000 personal property tax exemption that was eliminated by the implementation of LB 1107, the so called property tax relief bill. The more accurate name for this bill is “the decrease in the increase” bill, because that is what it really is. This bill did absolutely nothing to actually lower your property taxes this year. Let me explain why.
Over the course of the last five years property taxes statewide increased $813 million. As you can quickly figure out, that amounts to an annual increase of $162 million. LB 1107 grants to the people of Nebraska an annual reduction of $125 million in their property taxes. Sounds great, right? When subtracted from the annual increase of $162 million, it results in a net increase statewide of $37 million per year, instead of the usual $162 million. But, it gets worse.
Getting back to the loss of the personal property tax exemption, Statewide that exemption amounted to relief of $16 million per year prior to LB 1107. The personal property tax exemption was available to all businesses, including agricultural businesses, who had personal property associated with their business.
So, the net amount of property tax relief under LB 1107 is really $109 million statewide, instead of the $125 million as advertised by the advocates for this bill. Some said this bill is historic and significant property tax relief!
In essence, what this bill did was force us all to give up a guaranteed reduction in the personal property tax exemption for what we might get back if the State happens to get enough revenue to fund it. By now most of you have received notice from your county assessor informing you about the loss of your personal property tax exemption. Surprised? Frustrated? I understand your pain. For these reasons and more, I voted against LB 1107.
Nebraskans need a real solution to their tax problem, and the first step in any recovery program is to admit that a problem exists. Nebraska’s tax system is broken. It is unworkable. It is kaput! We can no longer afford to continue to play this ridiculous game of hide and seek taxation. What we need is something brand new. We need something that works, we need a tax system that is fair, and we need the kind of tax system that politicians can never tamper with.
So, what is the solution? The solution, in my humble opinion, is the consumption tax. In the weeks ahead I am going to introduce you to what I am calling the Taxpayer’s Bill of Rights. The time has come for taxpayers in Nebraska to begin asserting their rights as taxpayers. And when these rights are properly understood, the consumption tax begins to emerge as the obvious answer and self-evident solution to all of Nebraska’s tax woes.
I am very excited about the consumption tax solution to our State’s tax problem and I looking forwarding to discussing it with as many Nebraskans as possible in the days, weeks and months ahead.