Big changes needed in state’s tax system, Platte Institute head says
Nebraska hasn’t conducted a comprehensive look at the fundamentals of the state’s tax code in 50 years — and it’s time to do so, the head of the Platte Institute said Wednesday during a visit to Norfolk.
Jim Vokal and Bob Dudley of Norfolk, a member of the Platte Institute’s board of directors, hosted a lunch gathering at the Norfolk Country Club to share information about the institute’s work and discuss business- and tax-related issues facing Nebraska.
Vokal said the institute, which is based in Omaha and focuses on conducting research on economic issues facing Nebraska, is busy preparing for the 2019 legislative session when tax-related legislation will again be at the forefront.
“I sense things are changing in the Legislature,” Vokal said. “More senators are focusing on policy reform options.”
Nebraska’s population growth — or lack thereof — and business growth all are directly impacted by the state’s tax policies, he said.
What he’d like to see the state move toward — in a perfect world — would be to eliminate existing tax carve-outs or exemptions. The additional revenue brought in by getting rid of those could be used to first bring down the corporate tax rate, perhaps even to zero, Vokal said.
“We must do that because it’s the most damaging to growth,” he said.
Even with that done, there still would be plenty of tax revenue left for significant property tax relief, but there would have to be a caveat attached to that, Vokal said.
“The caveat is that we actually reduce rates,” he said in reference to the common reality of a local government taxing entity reducing its levy but still collecting more in revenue because of valuation increases.
The next step would be to lower personal income tax rates, Vokal said.
Realistically, that all probably can’t be done in one fell swoop, he said. “But anything is better than what we do now,” Vokal added.
Although Nebraska does have a local government spending problem, it’s not feasible to find a way to cut spending by $1 billion across the state in order to solve the state’s property tax problem. That’s why looking at how revenue is collected must be focused on, Vokal said.
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