(C) Daily Kos This story was originally published by Daily Kos and is unaltered. . . . . . . . . . . The Nebraska EPIC Sales Tax Would Be An Epic Disaster [1] ['This Content Is Not Subject To Review Daily Kos Staff Prior To Publication.'] Date: 2024-06-10 The so-called EPIC sales tax plan and its backers are in the last four weeks of a statewide petition drive to put it on the ballot in November. This so-called EPIC option would end all income, property and estate taxes and allegedly replace them with a sales tax of 7.5%. (The 7.5% figure is highly disputed. Much more on that below.) The business friendly and center right Tax Foundation has indicated that the EPIC plan would require a whopping statewide sales tax rate of 21.6% or more to be revenue neutral. “EPIC would likely result in substantial cross-border shopping, allowing Nebraskans close to a border with a lower state sales tax to avail themselves of the lower rates while leaving taxpayers in the interior of the state to bear the brunt of the newly established consumption tax. 75% of the state’s population lives within an hour’s drive of another state and that they would likely cross the border to shop because of the higher EPIC tax rate in Nebraska. No state has ever abolished the property tax, which is far and away the primary source of local government revenue in every state, but an ambitious Nebraska proposal would make the Cornhusker State the first to do so.” (All the above is from the Tax Foundation. ) Bryan Sloan of the Nebraska Chamber of Commerce agrees with the Tax Foundation: “My sense is and our sense all along has been that because it wouldn’t raise enough revenue. The first thing that would have to happen is the tax would have to be raised to double digits.” Rebecca Firestone, Open Sky: “Our analysis shows this proposal would require a much higher rate to be revenue neutral than is proposed.” No state has ever attempted to eliminate all state and local taxes and replace those revenue sources with a single sales tax. All state and local public services would be funded through the statewide sales tax scheme. A consensus has emerged that a 7.5% sales tax rate would result in a massive loss of revenues for the Nebraska state government. Nebraska’s Department of Revenue has estimated that the EPIC Sales tax scheme would most likely result in a net revenue loss of $5 billion by fiscal year 2027–28. The Open Sky Institute had predicted revenue losses as high as $7.4 billion a year. In a state with a $15 billion annual budget, eliminating $5 to $7 billion in revenue is simply reckless. A 22% states sales tax would hit middle class and low-income Nebraskans the hardest. Working families spend a much higher percentage of their income on necessities than the wealthy. Ending property taxes does nothing for people who don’t own property. The EPIC sales tax would fund a big tax cut for the rich and corporations with a tax increase on everybody else. Opposition to this risky tax scheme is bi-partisan. Nebraska Democratic Party Chair Jane Kleeb said the EPIC tax would “leave all Nebraskans paying more sales tax.” She said it is not a solution to high property taxes. Nebraska Governor Jim Pillen, business leaders and representatives of local governments and school boards, oppose the 22% sales tax proposal. Pillen and his allies said that the regressive sales tax would harm retail sales and the high sales tax rate would create uncertainty for businesses. “The EPIC tax is not a workable solution,” Pillen said. “It is not the solution that will save our ever-escalating property tax issue. We need to commit to broadening and balancing the base across property, income and sales tax.” This proposal has been around for a long time. Pillen addressed this radical scheme when he ran for governor. “The consumption tax would triple Nebraska’s sales tax. It would tax groceries, medicine, and many other everyday essentials. It would hurt Nebraskans on fixed incomes, ag producers, and job-creators. It would damage our economy and decimate our insurance industry. Bad idea.” Pillen tweet — 1/3/22. Former State Sen. Brett Lindstrom is now acting as the spokesman for the anti-EPIC tax group No New Taxes Nebraska. Lindstrom asserted that voters aren’t ready to increase sales taxes on every item. He said it would “create new taxes” on health care, dental care, prescriptions, veterinary care and attorney fees. There has to be a better way to reduce property taxes. The ideas are out there if only Pillen and the Republicans in the legislature can be convinced to support them. Or in the alternative, we elect people who more receptive to ideas other than trickle down economics. “Here’s what I will tell you: Nebraska must think outside the box if we want true tax relief. This means capping valuations, providing sustainable funding to public education (so property taxes aren’t the primary source of funding), and new revenue sources like medical marijuana, online gaming, etc. These options are the ONLY WAY to provide substantive and sustainable property tax relief, end of story, period.” State Senator Jen Day. Nebraska’s wealthy and corporations are lightly taxed. We also have one of the most generous corporate subsidy programs in the country. The legislature should revisit those programs and consider channeling some of that corporate subsidy funding into property tax relief. Nebraska’s biggest problems are a labor shortage and a brain drain. Nebraska’s “brain drain” — the net loss of college-educated people through migration to other states — has more than quadrupled in the last decade. We are not going to solve these problems with a 22% sales tax — that will only exacerbate the problem. Former State Senator Adam Morfeld: “If we were more focused on things young Nebraskans cared about and less focused on going after LGBTQ people, gutting public education, making reproductive healthcare impossible to obtain, and giving tax breaks to wealthy folks, then maybe we wouldn’t lose so many young people. If lawmakers want a guide to keeping young people in the state, here you go: 1. Stay out of our bedrooms 2. Invest in public transportation, culture, and entertainment 3. Affordable housing 4. Invest in childcare and healthcare 5. Legalize marijuana Whew that was tough.” I would add to the list the repeal of Nebraska’s so-called right to work (for less) law. Corporate “right to work” laws drive down wages. Nebraska is a low wage state and won’t be able to retain workers in the absence of pay increases. Nebraskans should decline to sign the petitions for the EPIC Sales tax plan. Placing this extreme plan on the ballot is very dangerous. It would be all too easy for huge amounts of billionaire campaign cash to fund this initiative with deceptive television ads. There are probably some right wing billionaires who would like the good people of Nebraska to act as guinea pigs for their crazy plan. Numerous good Democrats and independents are running for legislature around the state. I would urge you to invest your time and money in some of the legislative races. The composition of the legislature makes a big difference. Many voters don’t realize how powerful and important the state senators are. A successful election cycle can put a check and balance on the ambitions of the extreme Nebraska GOP. “Don’t agonize; organize. No whining; just winning.” Nancy Pelosi. Now let’s get it done! 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