Ranking Dings Nebraska for Low Growth & High Taxes

Ranking Dings Nebraska for Low Growth & High Taxes

The Tax Foundation's 2020 State Business Tax Climate Index is a great measure of how states are adhering to sound tax principles. The Tax Foundation ranks Nebraska as #28 for the business competitiveness of its overall tax code, at best middle of the pack, which is code for not very competitive. There are actually groups in Lincoln that use this data to say, "Nebraska is not a high-tax state. There's no problem here."

When looking at our property taxes and income taxes, though, we're clearly out of step with most of the country, and especially the states we compete with for jobs and opportunity. While many states are making pro-growth improvements to their tax codes, for the last several decades, Nebraska has mostly fallen behind by standing still.

Recently, USA Today published an article ranking the states by business competitiveness and once again, it's not great news for Nebraska. Our ranking is #27. Besides ranking behind most states in general, we lag neighbors including Colorado, Wyoming, South Dakota, and Iowa. Besides our Tax Foundation ranking, the article cites concerns about sluggish real GDP growth, which was 5th worst in the country, at 0.9%.  Economic growth has been relatively slow in Nebraska in recent years. Between 2013 and 2018, the state's economy grew by just 8.7%, slower than the comparable 13% national growth rate.

Over and over, groups in Lincoln state there is no relationship between our taxes and growth, or taxes and migration, and that things will improve if we have even more taxes and more spending, despite having no lack of both now.

With each depressing ranking that is published, it becomes clearer that we are in a tax crisis that is worsened by simply standing still.

Other states, red and blue, have figured out that a simple, sustainable tax structure is part of the recipe for economic success. If state leaders continue to stand still with no pro-growth solutions, we can expect more depressing news.

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