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1 Jared Walczak, A Twenty-First Century Tax Code for Nebraska 1 (2016)

handle is hein.taxfoundation/twfcodne0001 and id is 1 raw text is: TAXO FOUNDAT ON PlatteM INSTITUTE for economic research The Tax Foundation is the nation's leading independent tax policy research organization. Since 1937, our research, analysis, and experts have informed smarter tax policy at the federal, state, and local levels. We are a 501(c)(3) non-proit organization. Editor, Rachel Shuster Designer, Dan Carvajal Tax Foundation 1325 G Street, NW, Suite 950 Washington, DC 20005 Phone: 202.464.6200 taxfoundation.org The Platte Institute's mission is to leverage its research to advance policy solutions that remove the barriers to growth and opportunity in Nebraska. The Platte Institute is a nonpartisan, non-proit, 501(c)(3) organization. Platte Institute for Economic Research 6910 Paciic Street, Suite 216 Omaha, NE 68106 Phone: 402.452.3737 platteinstitute.org @2016 Tax Foundation Distributed under Creative Commons CC-BY NC 4.0 A Twenty-First Century Tax Code for Nebraska By Jared Walczak Policy Analyst Key Findings Nebraska's tax code, which is approaching its 50th anniversary, is designed around a 20th century economy and lacks the flexibility to embrace the dynamism of the 21st. The state's above-average individual income tax rates disadvantage individuals and pass-through businesses alike. Expansion of the sales tax base to include certain personal services could help pay down rate reductions, and further cuts could be phased in over time using triggers to ensure revenue stability. The Nebraska corporate income tax is characterized by high rates offset by substantial incentives for targeted industries. Policymakers could adopt a competitive single-rate corporate income tax by rolling back inefficient corporate tax credits, with possible further reductions subject to revenue triggers. Taxation of business equipment and other tangible personal property disincentivizes capital formation and imposes substantial compliance costs on Nebraska businesses. The state should consider approaches to reduce reliance on, or gradually phase out, tangible personal property taxes. Responsible tax reform would eliminate the sticker shock of the state's high top marginal rates, enhance tax neutrality, maintain revenue stability, and give Nebraska a competitive edge.