Nebraska’s tax system is completely broken. Nebraska is the worst state in the nation for the inheritance tax, the seventh worst state for property taxes and only Wisconsin beats Nebraska in terms of the number of farm and ranch bankruptcies. By now, many property owners have figured out that last year’s big property tax relief bill, LB1107, was nothing more than a slight decrease in the amount that property taxes increased this year, and this is how things will continue to be unless we overhaul the entire system.
No small plan ever had the power to stir the soul. So, this year I introduced LR11CA and LB133 for the consumption tax. The first piece of legislation is a resolution for a constitutional amendment to change our tax system; the second is a bill to direct the legislature in how to implement the consumption tax. LB133 re-writes the tax code. Public hearings will be held at the Capitol on both pieces of legislation on February 3.
My legislation is known as the EPIC Consumption Tax Act, where the word EPIC is an acronym which stands for the elimination of Property, Income and Corporate taxes. My legislation will repeal the state income tax, the state sales tax, the state inheritance tax and all property taxes and replace them all with a consumption tax.
The consumption tax prevents double taxation. The consumption tax would tax services and new goods. Used goods would never get taxed, because goods should only get taxed once. Imagine buying a used car or a used boat and paying no taxes on the purchase!
The real beauty of the consumption tax, though, is that it prevents over-taxation. It is the one tax that the taxpayer can control. If you don’t want to pay the tax, don’t go shopping. Moreover, the consumption tax ties government taxation to the economy. The government only gets more money to spend when consumers spend more of their own money first. Alexander Hamilton favored the consumption tax above all other forms of taxation in Federalist Paper 21 precisely because it controls this kind of over-taxation. Hamilton said, “It is a signal advantage of taxes on articles of consumption that they contain in their own nature a security against excess.”