LINCOLN — The latest idea to reform state taxes is drawing at least some interest from the Greater Omaha Chamber of Commerce.
That’s significant because the Omaha chamber was among the deluge of groups that voiced concerns and downright opposition last week to tax plans introduced by Gov. Dave Heineman.
The new plan is less ambitious than the governor’s main bill, which would have eliminated state income taxes on individuals and corporations. The governor’s plan would have shifted about $2.4 billion of the state’s tax load onto previously exempt sales, such as equipment purchased by manufacturers and farmers, supplies bought by hospitals and churches, dorm rooms rented by college students, and hospital beds and prescription drugs used by the sick.
Two co-sponsors of the governor’s plan, State Sens. Brad Ashford and Beau McCoy, both of Omaha, said Monday that they are abandoning that plan for a less-ambitious $1 billion tax swap.
It would reduce personal and corporate income tax rates to a maximum of 3 percent. The current top rates are 6.84 percent on taxable personal incomes over $54,000 for a couple, and 7.81 percent on corporate income over $100,000.
The tax shift would be financed by removing some sales tax exemptions, as well as perhaps new taxes on services such as haircuts and auto repairs.
Wendy Boyer, a representative of the Omaha chamber, said Monday that the newest plan is an improvement because it takes the taxing of manufacturing inputs off the table.
Taxing those inputs was criticized by businesses as a “job killer” that would add costs to Nebraska-made goods, making them uncompetitive.
But Boyer said it was too early to say if the chamber could support the new tax reform idea, because it’s not known exactly which tax exemptions would go away to finance the tax shift.
“It sounds great, but the devil’s in the details,” she said.
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