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Opinion: Tax modernization critical to ensure Nebraska’s growth

Opinion: Tax modernization critical to ensure Nebraska’s growth

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Two years ago I was asked if I would be willing to be part of something called Blueprint Nebraska. The goal of Blueprint is to imagine what you would like our state to look like in 20 years, then design a plan or blueprint to make it happen.

Blueprint Nebraska is developing a strategic plan for Nebraska to lead the Midwest in economic growth by 2030 and make Nebraska the best state to live, work and invest. This vision is the product of more than 60 public forums, drawing on the feedback of thousands of engaged Nebraskans on quality-of-life issues. The 15 key initiatives proposed by Blueprint Nebraska (blueprint-nebraska.org) are even more relevant today because of the effect that COVID-19 has had on us all, both the problems and the opportunities. The COVID-19 crisis has forever changed the way we live and work and even where we work.

New polling by the Platte Institute (platteinstitute.org) shows increased worries about Nebraska property taxes. A total of 43% of Nebraskans say property taxes are a greater concern than before the crisis. Concerns remain the same for 41%. Only 8% say property taxes are a lesser concern now. Our dependence on property tax is not sustainable.

Blueprint Nebraska’s 15 key initiatives cover a broad spectrum of ideas designed to move Nebraska forward. The initiative to modernize Nebraska’s tax strategy may be the most important to get done first.

Western Nebraska competes for workers and investment with Colorado, Wyoming, and South Dakota. In these states, property tax rates on a home, land, or building can be 25% to 50% less than Nebraska. In two of the three states, workers and businesses pay no state income tax.

Nebraska businesses pay personal property taxes on the equipment they need to operate their business. After a lifetime of paying high state taxes, Nebraska is one of only six states that charges the next generation an inheritance tax, which can be levied on just over $10,000 of property value. Look at the people fleeing the high tax states in the Northeast. Taxes matter.

In a recent report, the Tax Foundation’s Katherine Loughead outlined “Thirteen Priorities for Pro-Growth Tax Modernization in Nebraska.” I encourage you to read it (taxfoundation.org). Her findings align with the feedback we have received in the Blueprint Nebraska process. The report is full of ideas on how other states have already modernized their tax system. We can pick and choose the best practices and not have to reinvent the wheel.

Simply put, our tax system was designed in the mid-1960s and is now out of step with our competitors. There are too many taxes on the people and the investment we need to prosper in the 21st century, and these taxes have consequences.

Challenges in retaining and attracting a qualified workforce, developing housing and promoting entrepreneurship are all compounded by levying some of the highest taxes on workforce, housing and entrepreneurs in the region and country.

Tax modernization is certainly not the only area where Nebraskans see the need for change. But it is a critical part of helping communities like North Platte realize a future that looks brighter than its past.

Pat Keenan is a lifelong resident of North Platte. He is a steering committee member of Blueprint Nebraska and sits on the boards of the Platte Institute and the Nebraska Chamber of Commerce and Industry.

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