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Get Ready for the Taxpocalypse
- Published on Tuesday, 04 April 2017 20:24
- Written by thenebraskasigna
Get Ready for the Taxpocalypse
By J. L. Schmidt Statehouse Correspondent
TAX: a compulsory contribution to state revenue levied by the government on workers’ income and business profits or added to the cost of some goods, services, and transactions.
APOCALYPSE: an event involving destruction or damage on an awesome or catastrophic scale.
So it has happened. Nebraska lawmakers are finally facing what has likely been billed as THE biggest fight of the session. The taxpocalypse. Income tax breaks for the rich and changes in the way farmers‚Äô land is valued. What does that mean for the rest of us as we watch revenues decline and schools scramble to make ends meet?
With the 105th Legislature‚Äôs First Session two-thirds finished, the final 30 days will be spread over four-day work weeks with plans and compromises being hammered out behind closed doors in committee executive sessions. The pressure is mounting. It's more than economics at stake; it's politics and the future. It's political futures.
It's as much about a first-term governor looking at re-election in 2018 as it is about members of the Gang of 27, who bullied their way into leadership positions, showing their worth. The outcome of this tax debate could cost some senators their political futures, either as state senators or viable candidates for higher office.
Here's what's on the discussion table so far: Governor Pete Rickett's proposal (LB337 sponsored by Revenue Committee Chairman Sen. Jim Smith of Papillion) would gradually lower the state's top individual income tax rate from 6.84 percent to 5.99 percent over a minimum of eight years. The cuts would be enacted by a trigger if the state‚Äôs projected revenue increases more than 3.5 percent the previous year; Omaha Senator Brett Lindstrom's bill (LB542) would make similar, phased-in cuts to the top corporate income tax rate, and would immediately combine the state’s two lowest individual income tax brackets into one bracket with a rate of 3.1 percent; Bancroft Senator Lydia Brasch's proposal (LB338) would change how ag land is valued and place a 3.5 percent cap on the aggregate of farm- and ranch- land valuations; North Platte Senator Mike Groene’s proposal (LB640) would use money from the state’s property tax credit fund to offset new limits on property taxation by local schools.
Smith has rightfully dubbed this discussion "heavy lifting." He has also correctly predicted that some of the final decisions will come down to the wire as the session lurches toward a June 2 completion.
”It may look like we’re halfway there, but I think the heavy lifting will be at the end,” said Smith, chairman of the heavily partisan Revenue Committee. Seven of the eight committee members are Republicans. Omaha Senator Burke Harr is a Democrat, but has received some support in questioning - if not opposing -- the proposals from fellow committee member Paul Schumacher of Columbus who is more independent than many.
During initial discussions in the committee, the two expressed concerns about the lack of detail on the proposals. At one point, Harr likened the proposals to "Obamacare, where I have to pass it to find out what’s in it.” To his credit, Harr has asked for an analysis on how each proposal would impact people of varying wealth.
Schumacher has said the income tax cuts would offer the most savings to people making six-to-eight-figure salaries. He has offered a series of bills this year calling for an end to some tax incentive programs and has asked for studies of the economic impact of others.
Hats off to Harr and Schumacher for trying to stave off what is becoming the Republican Rubberstamp Legislature. May the taxpocalypse shake things out and not leave Nebraska facing the same struggles as our neighbors in Kansas and Oklahoma.