Nebraskans for Peace’s statement on the Nebraska Legislature’s Special
Session called by Governor Jim Pillen
The following is a statement put together by the Nebraskans for Peace Board that was sent to all of our State Senators.
In 1967 Nebraska adopted a 3-legged stool to finance state and local government to serve the people of Nebraska. The 3 primary revenue sources were income tax, a sales tax and a tax on property. Sales and income tax are for the most part paid directly to the state of Nebraska for statewide infrastructure and administration of state government. Most property tax is to fund local government [cities, county, K-12 public education]. Initially the intent of 3 revenue sources was to raise equal revenues and some of the sales and income tax was used to supplement state aid to local subdivisions. At the time of implementation there was much opposition, especially from the business community and chamber of commerce to these new taxes. Norbert Tiemann, a Republican, was elected governor in 1966 for a 4-year term. Previously, governors were elected for two-year terms. He supported these tax reforms to help equalize the tax obligation.
Governor Thiemann was defeated in 1970 primarily by the business community influence. James Exon was elected but did continue the plan with some tweaks.
Over the next 55 years the Nebraska tax system was tweaked the most during economic downturns by cutting state aid to the local government subdivisions [cities, county and public education] and in order to maintain government services these subdivisions were forced to rely more on property tax. During these years wealth began to accumulate into fewer hands, primarily by legislative actions that cut income tax rates and provided tax credits to large businesses. The result was that wealth began to be subsidized as the book Poverty by America describes. [Last winter’s NFP book study.]
Business interests have pitted states against each other by demanding tax incentives and lower income tax rates. Neighboring states like South Dakota and Wyoming have no state income tax, as they have other revenue sources (coal, tourism). Income tax remains the fairest and most just tax based on the ability to pay.
Another contributing factor to the over reliance on property tax is that wealthy outside investors have driven up the price of real estate. Initiative 300, which was added to the Nebraska Constitution in 1982 by a vote of the people, prohibited outside corporate interests from owning farmland. Initiative 300 was thrown out by the courts in 2005 which allowed outside interests to now own and finance land purchases.
The adage that “to whom much is given, much is required” should apply in our economic democracy, if it is to thrive.
In 1967 Nebraska adopted a 3-legged stool to finance state and local government to serve the people of Nebraska. The 3 primary revenue sources were income tax, a sales tax and a tax on property. Sales and income tax are for the most part paid directly to the state of Nebraska for statewide infrastructure and administration of state government. Most property tax is to fund local government [cities, county, K-12 public education]. Initially the intent of 3 revenue sources was to raise equal revenues and some of the sales and income tax was used to supplement state aid to local subdivisions. At the time of implementation there was much opposition, especially from the business community and chamber of commerce to these new taxes. Norbert Tiemann, a Republican, was elected governor in 1966 for a 4-year term. Previously, governors were elected for two-year terms. He supported these tax reforms to help equalize the tax obligation.
Governor Thiemann was defeated in 1970 primarily by the business community influence. James Exon was elected but did continue the plan with some tweaks.
Over the next 55 years the Nebraska tax system was tweaked the most during economic downturns by cutting state aid to the local government subdivisions [cities, county and public education] and in order to maintain government services these subdivisions were forced to rely more on property tax. During these years wealth began to accumulate into fewer hands, primarily by legislative actions that cut income tax rates and provided tax credits to large businesses. The result was that wealth began to be subsidized as the book Poverty by America describes. [Last winter’s NFP book study.]
Business interests have pitted states against each other by demanding tax incentives and lower income tax rates. Neighboring states like South Dakota and Wyoming have no state income tax, as they have other revenue sources (coal, tourism). Income tax remains the fairest and most just tax based on the ability to pay.
Another contributing factor to the over reliance on property tax is that wealthy outside investors have driven up the price of real estate. Initiative 300, which was added to the Nebraska Constitution in 1982 by a vote of the people, prohibited outside corporate interests from owning farmland. Initiative 300 was thrown out by the courts in 2005 which allowed outside interests to now own and finance land purchases.
The adage that “to whom much is given, much is required” should apply in our economic democracy, if it is to thrive.
