What is the Actual Legislation?
This year Sen. Erdman introduced two pieces of legislation:
- Legislative Resolution 264 CA. This resolution if passed will place a question on the Nebraska ballot in November with the following language: "A constitutional amendment to provide that, beginning January 1, 23 2024, no taxes other than retail consumption taxes and excise taxes shall be imposed upon the people of Nebraska." This resolution will be debated soon.
- Legislative Bill 133. This bill suggests a specific implementation of a tax code within the parameters set by LR 264 CA. It is a model bill and is not expected to be debated until LR 264 CA has been ratified by the voters in November.
A short description of each and a link to the actual legislation on Nebraska's legislative website may be found on our Documents Page.
What Is the Rate, Really?
Won't it take a 10, 15, or even 20% consumption tax to raise the same revenue as the current system?
We get questions and challenges to our Consumption Tax Plan, and we wonder where they come from. So, we are starting a regular feature to address these issues. The first one has to do with the proposed rate. We hear claims from various people speaking publicly that, in order to fully replace the revenues currently raised with five state and local taxes — the property tax, the state personal income tax, the state corporate income tax, the inheritance tax, and the state sales tax — Nebraska would have to impose a 10, 15, or even a 20% consumption tax!
Here are the facts:
- With those five taxes, the State of Nebraska raises $10.9 Billion, projected to the year 2024, the year our plan is to take effect, from all five sources of revenue.
- We have ascertained that amount and the remaining numbers in this story by a study done by the nationally recognized economic firm, The Beacon Hill Institute.
- A copy of that study may downloaded from this website, with a link on our Materials Page.
- The current retail sales tax base is $49 Billion.
- Projected to 2024, current Nebraska law exempts retail goods and services totaling $61 Billion.
- According to the Beacon Hill Institute's dynamic study, changes in behavior from the new law will increase the tax base by another $14 Billion.
- Add up the current retail tax base, the exemptions eliminated, and the behavioral increase, the new tax base becomes $124 Billion.
- Divide that $124 Billion into the needed revenue of $10.9 Billion, the result will be a rate of 8.97%!
Get out a calculator and try if for yourself, and you will see the math is correct. Then go to our EPIC Calculator, below, and compute your own savings!