Income Tax Bill Has First Hearing

Nicole Ebat

LINCOLN, NEB.(KPTM)--Nebraska Governor Dave Heineman's plan to get rid of income tax had its first hearing today.

The hearing lasted more than 7 hours Wednesday with people on all sides of the issue packing the room to voice their opinion.

It took more than three hours just to get to the public hearing portion.

State Senators Beau McCoy and Brad Ashford, co-sponsors of the bill, both spoke at the start of the hearing saying the process of changing taxes for the first time in decades wouldn't be easy, but that it should be worth it in the end.

LB405 calls for eliminating both personal and corporate income taxes. The 2.4 billion in tax revenue would be replaced by cutting 27 different state income taxes.

Governor Heineman said it's all a matter of fairness.

"Why do Nebraskans have to pay sales tax on the energy used in their home, but businesses like Lozier get a sales tax exemption?" he said at the hearing.

State Senator Paul Schumacher questioned how fair the bill would be to lower income Nebraskans. He said those making around $245,000 a year would receive a $15,000 tax cut in the bill is passed.

"If those folks are going to be paying considerable amounts of money less, who is going to be paying more?" he asked Sen. Ashford.

"I think that is a central question here, families that are in poverty, this should be revenue neutral for them," said Ashford. "They should not be paying more and hopefully they could be paying less."

A former Nebraska legislator attending the meeting disagreed.

"If you cut for somebody, you're going to add for somebody else and you're looking for somebody who's sleepy-eyed enough that they won't notice their taxes have come up. Well, we've found out in the last few weeks that there's nobody that sleepy-eyed," said Lowen Kruse.

Before the hearing, the Veterans for Foreign Wars announced it would be supporting the governor's bill.

A hearing for the scaled-down version of LB 405 will be held Thursday at 1:30 p.m. in the capitol building.