Home  >  Nebraska  >  NE: Opposition gathering to any move that taxes groceries

NE: Opposition gathering to any move that taxes groceries

By   /   November 30, 2012  /   30 Comments

By Deena Winter | Nebraska Watchdog

LINCOLN – As Gov. Dave Heineman considers ways to reduce or eliminate state income taxes, forces are aligning in opposition to any move to pay for his cuts by taxing groceries, medicine or medical equipment in Nebraska.

Unions, special interest groups and Democrats say they will oppose any attempt to start taxing groceries in Nebraska.

Heineman has said he’s looking at reducing income taxes for small businesses and possibly eliminating state income taxes, and speculation is mounting that he might try to repeal the sales tax exemption on groceries or other goods and services.

Omaha Sen. Steve Lathrop said he’s heard Heineman is looking at income tax cuts in exchange for eliminating certain sales tax exemptions — or all of them.

“I’d have to see the proposal (but) I think there’s a problem if we start imposing a sales tax on food and health care,” said Lathrop, a Democrat considering running for governor in 2014. “That’s the kind of tax shift that isn’t going to work.”

Omaha Sen. Jeremy Nordquist said if the governor proposes taxing groceries or health care so wealthy Nebraskans don’t have to pay income taxes, he’ll “fight him every step of the way.”

“Working families cannot afford a radical tax shift like the governor is floating —  a tax shift that will benefit high-income earners and make families who are struggling in this economy pay more at the grocery store or when they need medical care,” said Nordquist, who is also a Democrat. “Working, middle-class Nebraska families lose under this tax scheme.”

Last year, Nordquist fought against Heineman’s tax cut package until he targeted it more toward the middle class, and said he’s willing to work with the governor again to find ways to reduce the tax burden on middle-class families. Nordquist intends to introduce a bill to phase out taxes on Social Security benefits to make Nebraska’s tax climate more friendly to retirees.

But as Heineman looks for ways to make Nebraska’s tax climate more competitive, two unions and two special interest groups have already come out against any move to eliminate the state income tax, noting that income taxes account for about half the state’s general fund revenue.

“This idea would have very dangerous effects on the Nebraska economy and put at risk all of the basic, needed public services for which the state is responsible — both today and for future generations,” wrote the heads of the Nebraska State Education Association, Voices for Children of NebraskaCenter for People in Need and Nebraska Association of Public Employees/American Federation of State, County and Municipal Employees.

“It even could mean eliminating sales tax exemptions on groceries, making it even more expensive for working families — with their budgets already stretched to the breaking point — to put food on the table,” they wrote.

Carolyn Rooker, executive director of Voices for Children, said to eliminate the income tax, things such as education or health care would have to be drastically cut.

“Since lower-income families spend a larger share of their income on basic needs, like food, raising taxes on those things will impact low-income families more than others,” she said. “We would hate to see Nebraska increase taxes on families who can least afford to pay.”

The governor’s office declined to comment for this story, but it’s clear Heineman would like to keep up with the neighbors such as Kansas — which earlier this year lowered income tax rates and eliminated its tax on income for many businesses. Now some Missouri Republican lawmakers are talking about cutting business taxes to keep up with the Kansans. However, the Kansas income tax cut is expected to create a $4.5 billion budget deficit over six years, which that state will have to figure out how to erase.

Lathrop doesn’t want to see an income tax cut that puts a budgetary burden on counties, requiring them to increase their property taxes.

“I’m going to be vigilant to make sure what policies he’s promoting or tax cuts he’s offering don’t have the effect of raising property taxes,” Lathrop said.

Contact Deena Winter at deena@nebraskawatchdog.org.

— Edited by John Trump at jtrump@watchdog.org

Editor’s note: to subscribe to News Updates from Nebraska Watchdog at no cost, click here.

Please, feel free to "steal our stuff"! Just remember to credit Watchdog.org. Find out more

Deena Winter

  • D. Mark

    Why is everyone always looking for ways to raise our taxes, is there anyone out there looking at ways to reduce the waste in government?

  • http://www.facebook.com/profile.php?id=597406189 facebook-597406189

    Exempting food from taxation benefits the wealthy the most. Currently, no tax on porterhouse steak, lobster, or crab.

  • Malone1610

    The heads of the Nebraska State Education Association, Voices for Children of Nebraska, Center for People in Need and Nebraska Association of Public Employees/American Federation of State, County and Municipal Employees.

    Well look at who doesn’t want to cut taxes. All of the folks that have their money gobbling snots buried deep in the states tax trough. Seems like every coalition or association learns quickly how to dig their way into the money trough by supporting some feckless wanna be politician.

    Omaha Sen. Jeremy Nordquist has as big a mouth as Again Senator Ernie Chambers. You can tell the mentality of the people of Omaha by the brain dead representatives they elect that will say and do anything to get elected, and do nothing but spew their tired old rhetoric to their bully pulpits the willing media, who themselves are trying their best to remain relevant.

    Here’s a message to all you public sector crybabies that always want more tax money for your retirements and higher salaries, find some way to create wealth in this country rather than sucking all the working peoples wallets empty and flat. We need people creating money rather than living off of those that do.

  • http://twitter.com/PourSumShugOnMe Shug Knight

    Interesting how you completely ignore the vital services that public sector employees provide, as if they just get paid to do nothing. For example, uh, teachers. An educated workforce clearly has nothing to do with creating wealth in this country. How about police officers and firefighters? Are they leeches as well? By all means, go off the grid and see how enjoyable it is with no gubbermint interference in your life.

  • Joan

    Where does it all end? How much more will Gov. Heiniman ask from the middle class and the poor? Do you want us to line up and give our blood every six weeks so you can sell it? Don’t let us have Federally mandated healthcare and now tax our food so we can’t try to stay healthy by eating correctly because we can’t afford food. Did I miss something? Do I live in Hitlers Germany!

  • Malone1610

    Joan…..please wake up! Healthcare will not ever be free especially Obamacare. It will end up costing you more than you have ever paid for insurance. Please read the affordable care act. It will scare you to death.

  • http://www.facebook.com/profile.php?id=597406189 facebook-597406189

    Do you realize his proposal could abolish the state income tax help thousands of working poor Nebraskans?

  • Joan

    Malone1610 This may come as a surprise to you but I am very aware of the Affordable Healthcare Act and you are wrong it will not end up costing me more than I have ever paid because I have a preexisting terminal illness that I was born with and have never been able to get insurance to include life insurance. Funny isn’t it, everyone is born to die. Plus I never said “free” healthcare, you over react!

  • http://www.facebook.com/dan.brandt2 Dan Brandt

    If all you do is create a tax shift it does no good in the long run. The only way to eliminate taxes is to eliminate some government. Can it be done without goring anyone’s precious ox? First, decide what is inherently governmental and target the rest for elimination. Take DHHS, it is not inherently governmental. Either bid it out to local non-profits which already duplicate much of what DHHS does or make it into a non-profit. Then make donations to these non-profits worth 105% tax credits. (Non-profits are the most efficient form of business and can be regulated to require so much goes towards operations and the rest to the business.) You have then shifted funding from the state where it doesn’t belong to the private sector where it does. Either in increments or in one fell swoop, when enough government has been sent back to where it belongs, you cut taxes and the deductions to match. You have then shifted non-inherently governmental services back to the private sector where they belong. It is then up to the private sector to continue supporting the services. Why would they? If they don’t income taxes come back. What do you want? Government spending your money or you? I want to give to whom I want to give too. I don’t need the government doing it for me. They are too expensive and support many things I don’t. If it is worth while, it will get the funding it needs. If not, then it probably deserves to not be funded by anyone.

  • Joan

    The working poor do not pay taxes…Facebook.597406189

  • Jazzee

    Malone excellent point obamacare is a nightmare
    they need to read it !!

  • Jazzee

    oh yes it will cost you more…may cover pre-existing but dear someone has to pay for that FREE care of pre-existing and you and I will in premiums….obamacare is a mess

  • Jazzee

    oh MALONE you and I need to go have a beer
    I agree with you 100%………….never go after the spenders which are the public sector crybabies….amen

  • Jazzee

    individually they are great people
    UNIONS yes they are worthless and they LIE to the taxpayers all the time to achieve more for themselves…they never go without more please stop using the same old tactics we cannot afford it anymore

  • Jazzee

    NOPE….look what the council just did…gave the fire union the same pretty benefits it gave the police union..it was not the ‘deal of the century’ and suttle and the unions know dang well they raped the taxpayers again and sorry jean stothert nice try with we ‘saved’ the taxpayers but she lies too..don’t trust her her mouth says one thing but she does another..easy to be ‘tough’ when the votes are there to override you. they gave the fire union just like the police union another enhanced pension the DROP program more money more benefits–they lie wake up folks go read the contracts you are being duped again and again

  • Watching_From_Lincoln

    Herr Uberfuhrer HeineyMan, Koch brothers Uber Alles!!!

  • Watching_From_Lincoln

    Spoken like a truly ignorant person, facebook. Let’s see, what is more economically damaging, a family of four making $1,600/mo take home (Nebraska average) having to spend $400/mo plus another $28 in sales tax for their food, or 26.75% of their monthly income just for food – leaving them $1,172/mo to live off of, or a family of four making $5,000/mo take home spending $300/wk ($1,200/mo plus another $84/mo in sales tax) or 25.68% of their monthly income for food – leaving them $3,716/mo to live off of?

    As you can see, while as a percentage of income what is spent on food is nearly the same, as a detriment to the monthly family budget the lower class and poor take the brunt of the economic hardship with a sales tax on food.

    This is why in the early 1980′s, with the full blessing of the REPUBLICANS, sales tax on food was dropped in this state.

  • Watching_From_Lincoln

    And just where is YOUR gobbling snot (sic) buried?? Grover Norquist’s vertical smile, perhaps?

  • Jazzee

    Hey Joan…remember when you all think its great to tax smokers over and over now they are coming for your stuff….kind of makes me laugh. Let me ask you something: if the hated rich pay more in taxes will that get me a job or do I just get a check????? just askin’

  • Jazzee

    well maybe they should……a buck or two everyone should have ‘skin in the game’ as your obama guy would say

  • http://www.facebook.com/profile.php?id=597406189 facebook-597406189

    Bull, in Omaha, they pay 7 percent on toilet paper, diapers and on the water in the toilet, while lobster and steak are tax exempt. The current sales tax is more regressive than a lower consumer flat sales tax.

  • http://www.facebook.com/profile.php?id=597406189 facebook-597406189

    Skip the political partisan crap. The Nebraska sales tax is already more regressive than a regular sales tax. Toilet paper, diapers and the water in the toilet gets taxed at 7 percent in Omaha. It really is a shitty regressive tax.

  • http://www.facebook.com/profile.php?id=597406189 facebook-597406189

    The benefit of a sales tax is the ease of payment and the difficulty in avoiding it. Property tax, income tax and other taxes are far more detrimental to everyone, particularly the poor.

  • http://www.facebook.com/profile.php?id=597406189 facebook-597406189

    That is the point of having a flat sales tax so the rich are paying taxes on the lobster and steak they buy. Re-think your arguments.

  • Jazzee

    perhaps yours is Georgie Soros??? or move on???? or obama??
    what is your stupid point?

  • Franklyn Fahrkwhar

    The revenue problem in Nebraska stems from the huge number of tax exemptions that are granted to one particular group or another, for one reason or another. Each exemption, like a drop of rain, seems insignificant. When added up, they are a flood of lost revenue. Senator Rich Pahls has done extensive research on exemptions during his eight years in the Legislature. Governor Heineman would be wise to review Senator Pahls’ ideas for removing some of those exemptions before taxing a life-necessity like food.

  • Malone1610

    Typical liberal talking points WFL. When you get something you think of yourself post again will ya?

  • JoeSixPack56

    YES!!! Let’s increase the tax on cigarettes by a buck or two. We are way below the national average and about $4 behind New York State!

  • JoeSixPack56

    Would a flat sales tax cause the rich to pay on the new home they build in another country? What about the Rolls Royce they buy in Europe and ship back to the US – or that they leave in Europe to use when they fly over there for a month or two? Would they pay that sales tax on the food they buy in France? Would they pay sales tax on the plane ticket if they buy it in France?
    I think an income tax is much more fair.

  • nearoffutt

    The biggest population is Omaha. That is just a few exits from Iowa’s tax free grocery stores. Great idea, send people out of state to buy food. Might as well buy gas while there too! The 2¢/gal isn’t worth the drive, but tax free food at the same time? Fill it up!