There are several groups against this tax reform. From farmers to non-profits to some prominent business organizations, many say the sales tax exemptions needed to make up for the lost revenue will hurt Nebraska greatly.
"A sound tax policy is to have a diversified mix of taxes that includes broad sales, income, corporate and property taxes," Renee Fry said. Fry spoke at Wednesday's hearing on LB-405 on behalf of the OpenSky Policy Institute.
Through the elimination of many sales tax exemptions, Fry told the legislature's Revenue Committee that the bill would actually raise taxes on Nebraskans making more than $91,000 a year, or 80-percent of workers.
"If we get rid of the income tax, we are shifting the tax burden from high income earners, to low income earners," Fry said.
Many students at UNL would also take a hit. If passed, LB-405 would cost the average student living on campus about $650 more per year.
"For incoming freshman who are required to live on campus, this required cost could be a barrier to coming to the university," Meg Brannen with UNL's Residence Hall Association said.
One of the largest impacted groups would be Nebraska farmers. Gale Lush of Wilcox estimates the bill would cost him about $20,000 a year.
"At the end of the day, all us farmers want to do is stay in business," Lush said. "Whether we get hit by a train as LB-405 would, or get hit by a bus, the end result will not be much different."
Both the Nebraska and Lincoln chambers of commerce also spoke out against the bill.
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