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Monday, March 21, Nebraska’s Senate Revenue Committee defeated a bill that would have increased cigarette tax from 64 cents to $2.14 per pack. The bill also included language to increase the tax rate on other tobacco products from 21 percent to 31 percent.
The proposed legislation would have taxed cigarette smokers for the personal properties of other Nebraskan residents as an estimated $45 million would have been annual placed into the Personal Property Tax Relief Act which provides a tax exemption on personal property, up to the first $10,000. Another $45 million was slated to go into another property relief program, the Property Tax Credit Cash Fund which provides tax relief to property owners in the form of a tax credit.
Before dying in committee, an amendment was added to increase the Property Tax Credit fund to $71.7 million, an additional $8.3 million into the Personal Property Tax Relief Act, $10 million for grants to high-poverty schools, and $2.2 million to be used for tax credits to volunteer firefighters.
Of the $139 million in revenue expected from the tax increases, only $30 million was to be allotted to the Health Care Cash Fund, with and without the amendment.
Sen. Mike Gloor (N-Grand Alliance), who introduced the bill, stated in February of 2016 that “[Nebraska] must have more property tax relief. Specifically, [Nebraska] must become less dependent on property taxes to fund education.” It seems as if he wants 25% of the Nebraskan population to fund that relief.
This tax hike is a perfect example of how governments discriminate against a small group of people to fund everything from property tax to schools. The problem with such overreaching is the fact that there are more low income smokers than those who earn higher incomes. So, in Nebraska, this would have made low income earners literally pay for the personal property of the rich.