There’s nothing like a little tax talk to stir the blood of most Nebraskans. So expect some stirring this summer and fall when the state’s lawmakers begin holding hearings across the state. The newly formed Tax Modernization Committee will study the state’s tax system and report its findings in December, with hopes that Gov. Heineman will be able to accomplish the tax cuts he so badly wants.
Every tax is a bad tax to the person who has to pay it. Nebraska’s tax system is in need of a study, but we’re thinking comprehensive reform that actually produces something meaningful will take more than six months to accomplish.
For example, it was recently noted that Nebraska should try to follow Wyoming’s lead, because it is a low tax state. Really? Truth be told, Wyoming’s government spends more money per capita than Nebraska. It just has some valuable natural resources from which to tax instead of getting that money from its residents’ income.
A recent study by the Tax Foundation shows that Nebraska ranks 49th in state debt per capita ($1,277). Wyoming ranks 38th ($2,409). The rankings of other neighboring states, which also often come up when lawmakers like to make comparisons, are: Iowa, 38th ($2,478); South Dakota, 14th, ($4,321); Kansas, 39th ($2,406); Colorado, 29th ($3,214), and Missouri, 24th ($3,445).
South Dakota may have no income tax, but it’s debt per capita is more than three times as high as Nebraska’s.
So these studies need to look at more than taxes. They also need to look at spending patterns. Nebraska’s doesn’t look too bad, but it can always be better.