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AFP-NE to Committees: A Tax Shift is Not Tax Relief

Apr 25, 2019 by AFP

LINCOLN, NE – Americans for Prosperity-Nebraska on Wednesday urged members of the Revenue, Education and Nebraska Retirement Systems Committees to oppose AM1381 to LB289, a bill that would raise the sales tax by three-quarters of a cent and taxes on cigarettes and home purchases.

The grassroots group also released a one-pager showing that eight counties will actually pay more in increased sales taxes than they will receive in property tax relief under the proposal. The following counties are projected to receive tax increases under the LB289: Buffalo, Dodge, Douglas, Hall, Lancaster, Madison, Red Willow, and Scotts Bluff.

Making matters worse, the one-pager also shows that households making less than $24,000 spend 6.1% of their income on sales taxes. Households that make less than $25,000 per year consist of more than 20% of 59 of Nebraska’s 93 counties. With 26 counties having 25 – 36.8% of households making less than $25,000 per year, families simply can’t afford this tax swap.

You can view AFP-NE’s testimony before the committees here.

You can view AFP-NE’s tax swap handout here.

“Raising other taxes to provide property tax relief is an ineffective approach for tax relief. Instead of raising the sales tax, hurting those who can least afford it and driving people to shop in neighboring states with lower sales taxes, we should address the underlying issue of our property tax woes – spending,” said Jessica Shelburn, AFP-NE State Director.

“Under the proposed plan, eight counties and tens of thousands of households are projected to pay more in increased sales taxes than they will receive in property tax relief,” Shelburn continued. “This regressive tax shift will actually be a tax increase for many Nebraskans, hitting hardest those who can least afford it. Legislators should support a proposal that reduces the overall tax burden placed on Nebraska, not simply move tax revenue from one source to another.”

Background:

Controlling Spending is Key to Real Property Tax Relief, 4/18/19

Read Jessica Shelburn’s op-ed on property tax reform here.

The sales tax increase would hit low-income communities the hardest, as they already spend a disproportionate amount of their income on sales taxes.

With neighbors like Colorado, Missouri, South Dakota, and Wyoming already having lower state sales taxes than Nebraska, this proposed increase would make it even more likely that Nebraskans will choose to do their shopping out of state whenever possible, hurting local businesses.