Thursday, July 27, 2006

Heineman's 2007 Tax Agenda

by Kyle Michaelis
From the Lincoln Journal-Star a few weeks back, Gov. Dave Heineman reveals his intentions to abandon Nebraska's middle class to reduce the tax burden on the state's wealthiest residents:
[Heineman] said that next year he plans to focus on ending the estate tax and nibbling away at the income tax.

Nebraskans are moving out of the state because they don’t want to pay the estate taxes, he said.

Heineman doesn't say much, but what he does speaks volumes. What are probably the two most progressive taxes in the state for disproportionately affecting the wealthy? You guessed it - the income tax and the estate tax. Taking his cues from the Bush White House and the Republican Congress, it seems like a pretty safe bet that what reduction middle and low-income wage earners will see would be minimal under Heineman's eventual proposal, with the bulk of the cuts he's talking about targeted to those in the most powerful economic position.

Of course, it's no surprise that Heineman would be calling for more tax cuts. In the last fiscal year, the state budget produced an approximate $250 million surplus with $70 million more in revenue than had been projected. By default, that excess goes directly into the state's cash reserve fund. Heineman and the Legislature are already set to skim $100 million off the top of that fund to keep the budget balanced over the next two fiscal years. With it standing at an estimated $500 million, the temptation is going to be there to put even more of that back into taxpayers' pockets...which wouldn't be so bad if it weren't already clear that the pockets Heineman is most concerned about are the deepest and most finely-tailored.

There are also very legitimate concerns that the budgetary "good times" won't last. The reserve is known as a "rainy day" fund for a reason, and - with the projected growth of the state's liability for Medicaid expenses over the coming years - many forecasters are predicting a hell of a storm in Nebraska's future. We're talking biblical/Noah's Ark proportions.

Still, responsible government doesn't entail needlessly hording citizen's tax dollars. It's hard to fault attempts to come to a reasonable balance that looks to the needs of tomorrow without neglecting the needs of today. With rising fuel costs, rising health care costs, rising education costs, many Nebraskans are feeling an economic pinch. Heineman lacks the vision to seek ways of using the resources of the state to address these problems as a community, so he'll just look to make tax cuts that do nothing to resolve the systemic problems bleeding our senior citizens dry and driving our young people away for good.

Well, fine - there's more than one way to make an omelet, so there's probably more than one way to practice responsible stewardship of the people's resources. Except, Heineman has already turned his back on that principle by allowing his political party's unwavering allegiance to the upper-class to hijack the tax cut debate before it has even begun.

If Heineman is elected in November, he won't take the necessary steps to reduce property taxes, which are far and away the most burdensome on Nebraska families. Sure, talk of reforming property taxes must sound almost quixotic after eight years of the Johanns/Heineman status quo have failed to produce even an honest attempt to bring order to the system. But, their unforgiveable inaction is not a sign of impossibility. It's a challenge - no more and no less.

Just as Johanns and Heineman so often put their own political interests before the state's by forcing the Legislature to override their vetos on necessary and common sense spending proposals, they have also hid behind the theoretically local control of property taxes as an excuse to do nothing about them. Besides, property taxes are generally regressive in nature - meaning they disproportionately stand in the way of low wage-earner's dreams. Heineman - like Johanns before him - is a Republican. Why would a Republican care about people like that?

Sad but true. Nebraska deserves better than easy talk of tax cuts motivated by ideology and greed. We need a vision from our governor of something more than lining the pockets of the rich with token bags of peanuts (maybe even the price of a pizza) for everybody else.

Although he hasn't yet announced the details of his proposal, David Hahn has at least been talking about ways to make tax reform work for the common man rather than against him. With all the recent talk of property taxes in the U.S. Senate race, it's too bad Hahn hasn't been able to stand above both parties with a plan that would make sense to the people of Nebraska.

But, there's still time. There's still an opportunity - with the understanding that this is only one of dozens of issues on which Nebraskans have a choice between becoming a state that can prosper in the 21st Century or sinking further into the economic and cultural oblivion promised by Heineman and the Republican status quo.

2007 can be a beginning, or it can be another chapter in "the Good Life's" long goodbye. Wake up, Nebraska! Wake up before it is too late!


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