A new study says Nebraska taxpayers could benefit if the state ended tax incentive programs designed to attract certain businesses and industries.
Buena Vista University assistant economics professor Jeremy Horpedahl did the study for George Mason’s Mercatus Center. Horpedahl looked at what he calls “privileges” in the state’s tax code that industries, businesses, and individuals can use. Horpedahl’s report defines a privilege as a “part of the law that lowers the tax burden for an individual or a business, compared with others of the same income level.”
He says if those tax incentives went away, and the tax rate was lowered across-the-board, it would save Nebraska families an average of $3,200.
"And the reason this benefits the average family is because, while some of these privileges do benefit a typical family, most benefit certain industries to a large degree, or they benefit high-income earners. So some industries and high-income earners would see their taxes go up, but for an average family, my estimates show that they would go down fairly significantly."
Horpedahl says Nebraska could make up the revenue lost from ending tax incentives by taxing goods and services that the state doesn’t currently tax. He says Nebraska gave more than $2 billion in tax incentives in 2012, equal to about 29 percent of the state’s total sales, income, and property tax collections.
The report is available at www.mercatus.org.