Is A Consumption Tax The Solution To The Property Tax Dilemma?

By Gordon HopkinsRecent increases in property valuations have resulted in an increased interest in the EPIC (Eliminate Property, Income and Corporate taxes) proposal, with supporters proclaiming it is the solution to the ongoing problem of property tax relief in Nebraska. Others, however, see it as a potential financial disaster for the state.Two petitions are currently being circulated for constitutional amendments that would eliminate all forms of taxation in the State of Nebraska except for consumption and excise taxes.Consumption taxes are taxes on what people spend. Excise taxes are taxes imposed on certain goods, services, and activities. What the Petitions SayNebraska is one of 24 states that allow citizens to initiate legislation through the petition process.One of the petitions that is part of the EPIC tax proposal reads, “To add a new section 14 to Article VIII of the Nebraska State Constitution: VIII-14 Notwithstanding any other provision of this Constitution, beginning January 1, 2026, no governmental entity in the State of Nebraska may impose taxes other than retail consumption taxes or excise taxes.”A related petition would amend the state constitution to prevent exemptions. Conflicting InformationPart of the difficulty for voters is the conflicting information surrounding the EPIC proposal.For example, State Senator Steve Erdman cites a study from the Beacon Hill Institute for Public Policy Research, proposing a tax rate of 7.5 percent.According to Open Sky Policy Institute, a Nebraska organization that conducts fiscal research and analysis, 7.5 percent would be insufficient to fund the government. Open Sky suggests the actual rate required is closer to 22 percent. The Tax Foundation, an international research think tank based in Washington, D.C., agreed with Open Sky’s conclusions. Border BleedCritics of EPIC say one of the results would be “border bleed,” meaning Nebraska that live close to the state line would go shopping in other states to avoid the tax.In a recent editorial, Jim Vokal, CEO of the Platte Institute, wrote that if a 22 percent estimate is accurate, “This is triple the current sales tax rate and staggeringly higher than sales tax rates in neighboring states. The result would be a disproportionate burden on certain resident demographics and likely lead to a loss of business and employers to competitor states. With so much of our population concentrated on the eastern border, sales tax avoidance would not only be easy, it would lead to a growing cottage industry of retail sales just across the border in Iowa.”In a press conference held at the State Capital on May 21 of this year, State Senator Steve Erdman said, “Those people who rent a U-Haul and go across the state border and never come back. That’s the border bleed I’m worried about.” What Local Supporters SayDespite the criticism, EPC does have some local supporters. One of those is Bradley Kuzelka, Fairbury City Councilperson, District 2, who supports of EPIC but believes it much be paired with another significant policy change. He told FJN via direct messaging, “I do support EPIC tax option, as long as we make massive cuts as well to the budget. I would like to see MUCH less government. As little as possible. There are FAR too many government agencies. My Right to own property is infringed by property taxes.”FJN asked Jefferson County Republic Party chair Janice McIntyre for her position on EPIC. She did not respond but has helped gather signatures for the initiative. On Facebook, McIntyre posted, “Yes, we need to insist/demand that our local, State, and Federal governments cut back their spending, AND we can help inspire them to do that by voting in the EPIC Option, if we can get it on the ballot. Our current taxation is destroying us, eating us alive. AND it is NOT in alignment with the concept of freedom.” What Local Opponents SayJefferson County Commissioner Gale Pohlmann has concerns that the recent uproar over property tax valuations will turn more people toward the EPIC tax. In an email, Pohlmann wrote, “It’s pretty easy to see how this proposal just don’t work, but some people sure think this will solve all our problems with property taxes. With the increased valuations out now, I hope this don’t sway people to just sign on to the petition not realizing what they are asking for. Imagine paying a 22% tax on a $500,000 combine!!”One of County Commissioner Mark Schoenrock’s concerns is the trying to run the state with a single source of tax income. As he noted in a recent editorial, “First, how would Nebraska fare without a diverse stream of income sources? The EPIC Consumption Tax, as introduced, will replace all other state and local taxes in Nebraska, making this new tax on goods and services the only source of revenue for the state, cities, counties, school districts, fire districts, natural resource districts and any other current taxing authority in the state. And what happens when the consumption tax revenue doesn’t cover local needs? What if projections fall short? How does the state backfill the shortfalls if the only local revenue source declines at the same time as the only state revenue source?”FJN asked newly elected County Commissioner Danielle Schwab for her position on EPC. She did not respond as of press time.

Cannon Installed At Fairbury City Park

From Clerk To Coordinator

Related Articles

Data Breach Impacts Local School Districts

Fairbury Laundromat Reopens

Danielle Schwab Sworn In As First Woman On Jefferson County Board

Gage County Supervisors Reject Latest Deputies’ Union Contract