Consumption Tax

Over the course of the past several weeks I have been outlining the Nebraska Taxpayer Bill of Rights which will appear in Legislation I plan to introduce in January for a consumption tax. The consumption tax will replace the State income tax, property tax, State sales tax, and inheritance tax. It is the best solution to Nebraska’s tax problems.

The right that I will talk about this week pertains to the Nebraska Department of Revenue. This right of the people states that “The Nebraska Department of Revenue shall be subject to the citizens of the State of Nebraska by readily correcting errors of taxation and granting temporary relief to registered sellers suffering hardship due to the burden of paying taxes.”

For most citizens living in Nebraska, the consumption tax will remove the Nebraska Department of Revenue from their life. Because the consumption tax is paid to retailers or registered sellers, the average citizens should never have to interact with the Nebraska Department of Revenue. You pay the tax to the store and you are done with it. No more wrangling with property assessors, no more income tax audits, and when you die your heirs will get everything you willed to them. Those who will have to interact with the Nebraska Department of Revenue will be those selling services and new goods. For the most part this will be no different than how retailers currently interact with the Nebraska Department of Revenue in regards to the current State sales tax. The difference will be that those selling services will have to collect and remit the consumption tax as well.

Generally speaking, state agencies should be seen, but not heard. In other words, state agencies run best when those running the department view themselves as servants of the people. Unfortunately, all too often those running state agencies do not share this philosophy. Whenever those in government view themselves more as law enforcement agents than as servants of the people, the people suffer. The time has come for the suffering of the people to end. For this reason, it needs to be explicitly stated as a right of the taxpayer that the Nebraska Department of Revenue is subject to the people of the State rather than the other way around.

When it comes to attracting new businesses in Nebraska or attracting already established businesses to move to Nebraska, we have failed miserably. The old tired philosophy of incentivizing businesses to come to Nebraska has not worked. It did not keep Con Agra in our state, and there is no reason to believe that any other business would ever want to move to Nebraska so long as our current tax system punishes businesses for being successful.

I believe wholeheartedly that Nebraska needs to completely overhaul its tax code, and replacing four of our current taxes with a consumption tax along with creating a user friendly Department of Revenue will cause new businesses to flourish in our state.