Tax Shifts and Tax Cuts
Tax Shifts and Tax Cuts
What Happens Post-Ricketts?
With Governor Ricketts about to exit, I wonder if the Unicameral will be looking at tax shifts again. Ricketts despises tax shifts as Nebraska has an ugly history of taxation.
During the 1960s, the State developed an income tax and sales tax to alleviate property taxes(https://nebraskalegislature.gov/app_rev/source/narrative_indinctaxhistory.htm andhttps://nebraskalegislature.gov/app_rev/source/narrative_corpinctaxhistory.htm andhttps://nebraskalegislature.gov/app_rev/source/narrative_salestaxhistory.htm).
Part of the problem is Nebraska created sales tax exemptions for food. This was pushed through the Unicameral by former Senator Ernie Chambers in the 1980s but the time has come to remove the exemption. As for the poor, their EBT cards are exempt from the tax (https://dhhs.ne.gov/Pages/EBT.aspx).
Ricketts maintained holding the growth of government down and it worked. Under Ricketts, Nebraska Unicameral delivered tax cuts.
(I wish Omaha Mayor Stothert and the City Council were more cogent on this matter.) Holding government growth down and limiting it has a good impact on the economy because government only works for certain things, not everything.
However, property taxes are the cruelest and most inhumane tax system existing today. If it did not already exist, do you think anyone would say “hey, I have a great idea. Let us use property taxes to fund the government!” Merely the evaluation of properties is a bureaucratic dystopian nightmare. Will a new Unicameral do anything about it?
The property tax cost dampens the demand for houses, and housing development and contributes to homelessness. Businesses end up going to the Omaha City Council to seek TIFs to cut costs. Well, why can’t Omaha just abandon the whole property tax system and TIF the whole City?
If property taxes are to continue, the total tax should not exceed 1 percent of the value of the home. If you check your property tax statement and evaluation, it is about 2 percent. With high property tax levels, the economy is distorted and dragged. Ideally, the property tax should not exceed half of one percent of evaluation. At 1 percent, if the house is only worth $100,000 and you pay $1000 a year, over 30 years, you pay $30,000 plus whatever changes in house value occur. This is factored into mortgages as well as rental properties. (The renter does not see the tax, but the landlord charges them enough to cover such tax.) But, our existing property tax is actually much higher and you end up paying over $2,000 on a property of $100,000 and end up paying $60,000 over 30 years. Not to mention the interest on mortgages. As for evaluations, far better to skip the market and instead use the figures insurance companies use to determine how much a house is worth. Sure, the evaluation amount is higher, but the levy can be reset to a lower level and the replacement figure would not be subject to wild market fluctuations.
Right now, the EPIC Consumption tax is the only serious proposal (https://epicoption.org/) yet elected official after elected official demonstrate their ignorance about tax policy and what a consumption tax is. There are no real alternatives on the horizon. So, what will happen in the new Unicameral?
The Douglas County Republican Party is pushing to obtain a 33 Republican majority in the non-partisan Nebraska Unicameral. You can even get some nifty swag from their shop (https://secure.winred.com/douglas-county-gop/storefront/?collection=33+Majority#). You might want to contact the candidates running for Unicameral and have a bit of a discussion with them about taxes. See websites with contact information at this link to a previous article of mine.