LINCOLN — Gov. Dave Heineman told a leading Tea Party group Thursday that he will insist that state lawmakers deliver tax relief to individual Nebraskans before offering it to anyone else.
“I'm going to hold their feet to the fire,” Heineman said. “By December, they need to have a tax relief plan that helps individual Nebraskans.”
The Republican governor was the keynote speaker at the annual legislative day for Americans for Prosperity Nebraska.
The conservative political advocacy group was one of few to back the governor's plan to eliminate state income taxes and shift taxes onto previously exempt purchases by businesses, farmers, hospitals, churches and other nonprofit groups.
That proposal and a second, less ambitious plan to eliminate corporate income taxes were both killed after a deluge of opposition from those groups now enjoying sales tax exemptions.
Heineman told about 100 AFP members that he remains convinced that Nebraska exempts too many purchases from sales taxes.
If only half the current $5 billion in sales tax exemptions could be rescinded, he said, the state could eliminate all income taxes on individuals and corporations, which would create higher-paying jobs and keep young people from moving away.
“The fastest-growing states are the ones without income taxes or (with) low income taxes. That's a fact of life,” Heineman said.
The Legislature is planning a comprehensive study of the state tax system, with a report due in December on what changes should be made.
Heineman said he supports the study and would still be open to enacting some tax reforms during the current legislative session.
But he opposed a tax-relief bill that would help a Kansas-based company build a $300 million wind farm in northeast Nebraska. The Legislature's priority needs to be tax breaks for individual Nebraskans, senior citizens and veterans, he said.
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