Issue Position: Taxes

Issue Position

To ensure the continual growth of the Nebraskan economy, we must lower the heavy tax burden that ordinary Nebraskans shoulder. Nebraskans' bear the 3rd highest property tax rate[1], the 9th highest income tax rate[2], and the State is ranked 42nd in terms of the business tax rate climate[3]. We must reduce property, income, and small business taxes and move to a tax structure that does not punish people for working hard or investing in their communities. Lower taxes will put money back into the pockets of hard-working Nebraskans, facilitate entrepreneurship and the growth of small businesses, and bring strong economic growth to the state of Nebraska.

Tax Objective 1

Lower Taxes on Income and Small Businesses - Our current tax structure is unfair and inefficient. It forces individuals and companies to pay higher/more taxes the more they earn. Instead of taxing people for their work and success, we should be encouraging them to earn and produce more.

Tax Approach 1

Replace "Progressive" Tax with the "Flat" Tax - Our current "progressive" tax structure is convoluted and inefficient, causing hard-working individuals and businesses to pay more taxes compared to our neighboring states. The implementation of the "flat" tax would simplify our tax structure and further encourage individuals and businesses to invest in the Nebraskan economy.

Over twenty countries and six states have incorporated a flat-tax system on individuals and companies. Because of added efficiency and more compliance with the flat tax codes, some areas have seen as much as 7.5%-9.5% of GDP increase in tax revenues, allowing for extensive economic growth and further cuts in tax rates[4].

Tax Objective 2

Lower Property Taxes - Nebraska's land and business owners bear over 33% of the total tax burden [5]. High property taxes stunt the state's economic growth and must be brought into check.

Tax Approach 2

Income Capitalization - Nebraska must adopt an income capitalization approach to assessing property taxes. Income capitalization is the most equitable way of valuing agricultural land for tax purposes. The implementation of such an approach should use the best price, yield, expense and landowner share data available, taking into account the land's location and allow for obsolescence in order to assess the land based on its earnings capacity and remove influences outside of agriculture from the assessment process. The approach shall be implemented in a way to maintain landowners' rights to appeal. There should be consideration of the formation of an advisory review commission to assist in implementation of an income capitalization approach and capitalization rates.

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