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A last look at the Nebraska Zone
March 01, 2012 Jerry Purvis   

Read more by Jerry Purvis

Jerry Purvis, News Editor

It was five years ago when I last wrote about this. And several of the things I complained about then are still around today. That’s because George Santayana was right when he said those who will not learn from history are doomed to repeat it.

In order to define my main term, I’ll need to make a short detour. One of my all-time favorite television programs is The Twilight Zone. Starting in 1959, the five-season anthology series examined the human condition and how it reacted to a world where things didn’t always operate as expected.

Some of the subject matter included a time machine that was masquerading as an antique radio. Another involved an aging salesman who achieved his best self by giving the sales pitch of a lifetime to Mr. Death, who had come to take away a little girl. And another was about a dipsomaniac ventriloquist who claimed his dummy was alive.

Filmed in glorious black and white, these short, polished films drew people in, challenging them to use their imaginations. It was the kind of series that would never make it in today’s television wasteland.

Before I get too far off in the weeds, the expression I used five years ago was the Nebraska Zone. It’s still here as our own version of The Twilight Zone. It’s a place where dunderheaded political decisions have unintended consequences, where the greed that makes people do strange things has locked us into repeating the past – kind of like an endless feedback loop.

What keeps us repeating the past is an ongoing, underlying attitude among politicians at all levels. It’s the erroneous attitude that money earned by the folks through the sweat of their brow rightfully belongs to the government.

When I last wrote about this in 2007, Gov. David Heineman had just visited the area to declare war on Nebraska’s outrageous tax rate. And he had a point. Figures from the Tax Foundation that year revealed the state’s estimated tax burden was 11.9 percent, the ninth highest in the nation.

That was also the year everyone’s property taxes went up an average of seven percent. In fact, mine went up about 200 dollars on a property where I made no improvements other than keeping the weeds out of the garden.

Even today, county assessors claim they’re not to blame because they’re only following state statute. But the state said it got out of the property tax business in the 1960s. It kind of reminds me of the two “invisible” excuses that occasionally show up in the comic strip Family Circus. Their names are Not Me and Ida Know.

The governor has helped make several improvements since that visit in 2007. National business journals are now looking at Nebraska as a place where entrepreneurs should relocate to start and grow their businesses. But some outrages still remain.

One is the fact that Nebraska is among the few states that continues to tax Social Security benefits. As a colleague told me, it’s as if the state is telling senior citizens “We don’t want you here.”
As for our laws for licensing and registering vehicles, well, I think the state might as well just stick a gun in our face. And until it changes, I’ll never again buy a new or even late model car in this state. Like financial guy Dave Ramsey recommends, I’ll go with a beater – something that’s dropped off the tax schedule.

Ours is kind of a strange vehicle taxing system, given that many neighboring states have a flat rate for registering vehicles – whether it’s a new Mercedes or a rusted out Ford Fiesta. I guess they figure it’s not their business what kind of car people drive.
In a repeat from 2007, Gov. Heineman (actually his second in command) came out west early this year with another plan – this one to eliminate the state’s inheritance tax, sometimes called the death tax.

Nebraska is one of only eight states in the nation that still has a death tax. New York, California and Massachusetts, all high tax states, don’t have one. And Forbes magazine gave Nebraska the dubious honor of being a state in which not to die.

In a state where the number one economic engine is agriculture, producers are often asset rich and cash poor. And nearly all of them want to pass their farms and ranches on to their children and grandchildren. They want their legacy to remain in the family.
But when they die, it’s a sad fact their heirs often have to sell the property to pay the death tax demanded by the state.

The governor wanted to change that, but the blowback was immediate from the counties. Without the death tax, our own Scotts Bluff County would lose anywhere from $300,000 to $600,000 a year, depending on how fast people are dying.

Years ago, a county commissioner told me they liked the death tax because it doesn’t count against the county’s levy lid on spending. And those dollars can be spent on just about anything.

Now it appears county officials have convinced enough state legislators to oppose the governor on the death tax issue. A recent statewide editorial comic had a horse stopped at the fence labeled “Inheritance Tax Repeal,” with Heineman on the other side, thrown from the horse and his head stuck in the mud.

For years, counties have complained that without the death tax money, they’d have to raise property taxes. Another comic from years ago had a sketch of an average Nebraskan suggesting government cut its spending and live within its budget – just like every household in the state must do. The translation underneath said “I’m new to Nebraska.”

So what are the long-term consequences of a confiscatory tax policy? Take a look at California, where businesses are headed for the exits in droves. A lot of them are heading to Texas, where the state is more business friendly.

In the past few years, Nebraska has started to get the hint. They started getting rid of some of the state’s onerous taxes. But many still remain.

Consequently, people are discouraged from starting new businesses. Young people, who have gone elsewhere for college, don’t return because they can’t afford it. So, our future stays away. And residents in their productive years grow tired of high taxes and move to more tax-friendly states.

Years ago, a newspaper letter writer complained that taxes should never be the driving force in anything you buy, like a car or a house. As he wrote, “This country is supposed to be the place where dreams come true, not where they are crushed.”

I wonder what he thinks about our current federal government. Talk about crushed dreams.

I sure hope we can get to a place where Joe and Jane Average can get a break. But there are powerful groups who don’t want the Tax Express to even slow down – mainly because they’re on the gravy train. And it’s been that way for decades.

I want to be optimistic, but I’ve seen this particular episode of the Nebraska Zone too many times to believe the ending will be different.
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