For the last few days, the legislature has been debating taxes or, to be more precise, they have been debating having a debate about taxes. The tax talk started earlier this year when Governor Dave Heineman pushed for the introduction of two bills to radically change the state tax structure by eliminating or significantly reducing income taxes and increasing reliance on sales taxes. Voices for Children opposed these bills because increases in sales tax disproportionately impact lower income families and eliminating the income tax would decrease our state’s ability to make smart investments in children’s health, education and well-being. The bills ultimately failed to garner enough support to advance from committee.
Instead, the Revenue committee advanced LB 613, a bill to create a commission to study tax reform and make recommendations to the legislature by December of this year. Voices for Children supported this bill because a thoughtful examination of our tax structure presents an opportunity to ensure that Nebraska has adequate revenue to fund children’s services now and into the future.
The bill was the target of a filibuster by State Senator Ernie Chambers but ultimately advanced and is expected to successfully make it through the legislative process. Then the real hard work will began.
As anyone who has filed a tax return knows, our state tax code isn’t simple. It contains a patchwork of exemptions and deductions. It was also written in a time before internet sales and when the economy was more heavily comprised of goods as opposed to services. Although we disagree with the Governor’s approach to tax reform, he’s probably right that a serious examination of our tax structure is long overdue.
As this moves forward, the stakes for kids will be high. Not only are they our future taxpayers, but the funds that currently provide for their education and health are also at stake. We’ll be highlighting ways to engage in the tax conversation as they become available, and we hope that advocates will speak up for kids as the process moves forward.
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