TAX MAN: This is what tax reform looks like in Cornhusker state
What do you think of when you hear the name “Nebraska”? Steaks? But? Warren Buffett?
It turns out they have a few things in common with us. They take pride in their quality of life (but for different reasons than ours), and they face a demographic decline just like us.
And they’re trying to do something about it. âGrowing the Good Life Starts Hereâ is the theme of Blueprint Nebraska, a company with 2,000 participants that aims to make Nebraska more competitive in terms of economy and people.
They want to reverse the âbrain drainâ that we in Hawai’i have been complaining about for some time, and bring 43,000 new people between the ages of 18 and 34 into the state. They want to grow the pie, adding 25,000 jobs and $ 15,000 to the annual income of each resident.
When the folks at Blueprint Nebraska looked at their tax system, they came up with a major overhaul. Here’s what they had to say about it:
Blueprint Nebraska’s Tax and Incentives Industry Council drew on polls, public forums and tax policy research to develop a plan that gives Nebraska a competitive tax climate regionally and beyond. attractive to the talented workforce.
Key benefits for Nebraskans include allowing taxpayers to earn up to $ 50,000 without state income tax, spending an additional $ 2 billion in property tax relief over the years. Next 10 years and the elimination of Nebraska inheritance tax.
This is in addition to the new student loan relief programs and the doubling of research and development investments.
Many states that we compete with for people and investments – red and blue – have no state income tax, or at least a lower income and land tax, and very little ‘States have inheritance rights.
But these bold changes would not be financially possible without providing alternative income.
Blueprint Nebraska proposes to fund tax modernization through a major overhaul of current sales tax exemptions, the elimination of itemized deductions for state income taxes and ending most tax credits on state income. companies.
Notably, the plan does not propose to increase state sales tax or remove the sales tax exemption on unprepared grocery items.
In addition, eligibility for the tax exemption bracket would gradually disappear for the highest paid taxpayers.
Tax reform is never easy, but the recommendations align with an essential tenet of tax policy: a large tax base allows large revenues to be collected at a lower tax rate.
Here in Hawai’i, we must also look at competitiveness, as we have already argued many times in this space. We need to work on a solution that allows us to grow the economic pie rather than just saying more shares go to government.
One way to do this is to look at the two taxes we have that make the most money, namely GET and personal income tax, and perhaps reduce exemptions and tax cuts. credits either to make the code fairer or to adopt systems that ensure that we as a people get value for the credits and incentives that we give.
We should learn, compete, improve.
We should do more to study other states, especially those with which we compete for people. We can learn from their successes and their failures.
Tom yamachika is president of the Tax Foundation of Hawaii.