Home News EPIC talk: Henderson Chamber of Commerce holds meeting about EPIC tax option

EPIC talk: Henderson Chamber of Commerce holds meeting about EPIC tax option

146
0

Tiffany Friesen Milone, deputy director of Lincoln-based think tank OpenSky Policy Institute, spoke in Henderson on Monday about the EPIC tax option, which would replace all state income, property, inheritance, and corporate taxes with a consumption tax and excise taxes.

Reprinted from York News-Times by William Swett

The Henderson Chamber of Commerce recently hosted a presentation from OpenSky Policy Institute about the EPIC Option, a proposed tax cut which would eliminate all state income, property, inheritance, and corporate taxes.

Tiffany Friesen Milone, deputy director of OpenSky Policy Institute, a Lincoln-based think tank focused on budget and tax policy, shared her organization’s findings and answered questions about EPIC on Monday at Sparrows Branch restaurant in Henderson.

EPIC has been proposed via two different means: LB 79, a piece of legislation which was heard in the last legislative session and ballot initiatives, which would change the state constitution. Sen. Steve Erdman of Bayard is leading the legislation effort.

Before the two ballot initiatives could be on the ballot in November, they would need to receive about 122,600 signatures from registered voters, Milone said, including 5% of registered voters in 38 of 93 counties by July 2024.

The two ballot initiatives are closely related. One ballot initiative says Nebraska cannot impose any taxes other than “retail consumption taxes or excise taxes,” while the other initiative specifies the only possible exemption: “grocery items purchased for off-premises consumption.”

Proponents of the EPIC option say the elimination of income, property, inheritance and corporate taxes would drive growth and attract new people to move to the state.

A study from the Beacon Hill Institute for Public Policy Research, which Milone said was commissioned by proponents of EPIC, estimated the consumption tax would have to be at about 7.5% to make up for the loss in revenue from other taxes.

But Milone said on Monday there are reasons to call the Beacon Hill study into question. The study assumed “generous growth” due to the elimination of these other taxes, Milone said, and counted on 44,000 people moving to Nebraska by 2030 because of the tax cuts.

The Beacon Hill study also included items that cannot legally or feasibly be taxed in its estimated revenue, including state and government spending and business inputs, Milone said.

Milone said two think tanks — the right-leaning Tax Foundation and the left-leaning ITEP — estimate the consumption tax would, in fact, have to be set at greater than 21% to avoid billions of dollars of deficit.

Milone also noted it would be a regressive tax, meaning poor Nebraskans would pay a larger share of their income on taxes than richer Nebraskans. Out-of-state property owners could also benefit from not having to pay taxes without contributing to the local economy, Milone noted.

A number of organizations and chambers of commerce in the state — including the Nebraska Chamber of Commerce and Grand Island’s chamber — have come out against the tax.

The York Chamber of Commerce does not have an official position on the tax.

Residents on Monday asked a variety of questions, including about the logistics of how such a policy would be carried out.

A major concern about the ballot initiatives, Milone said, was how to interpret the ballot initiatives. If adopted, Milone said, it would be up to the legislature to implement them, giving the legislature “broad power.”

The legislature would approve local government and school budgets, Milone said. Heartland Public Schools Superintendent Jeremy Klein worried that if school budgets are determined by the state and not local government, schools might start “to be run like the state prison system or the department of Health and Human Services.”

Another attendee wondered how the state legislature would have time to consider local budgets when it has trouble finding time to pass legislation now.