Photo by Demetria Heineman, flanked by John Hilgert and David Beran.

Members of the Department of Veterans’ Affairs and Veterans of Foreign Wars supported Gov. Dave Heineman’s proposed tax reform bill in a press conference Wednesday.

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In a unanimous vote Jan. 26, the VFW voted to support LB 405 that would eliminate income tax on all forms of income, including Social Security benefits, military retirement and all pensions.

John Hilgert, the director of the Nebraska Department of Veterans’ Affairs, said he thinks the bill will help the future of Nebraska.

“I don’t know a single soldier who fought for the past. They fought for their future,” Hilgert said.

Dave Beran, state commander of the VFW, said that many Nebraska veterans are living month to month. To help these veterans, he said they had no choice but to support Heineman on this bill.

Beran also said that many younger veterans are choosing to live in other states because it is cheaper to live there.

If the bill passes, sales taxes would be levied on many more items, including medicines, energy, seed, fertilizer and farm equipment, to compensate for the loss of income tax revenue to the state.

Opponents

“LB 405 will also harm healthcare in rural Nebraska,” said opponent Jon Bailey of the Center for Rural Affairs. “Over $140 million will be taken from Nebraskans in new sales taxes for prescription drugs, medical equipment and hospital rooms. As a result, the elderly, the middle class, those without health insurance or with inadequate health insurance and people with disabilities will be hit with a new “sick tax” that is imposed only because someone needs medical care.”

Bailey said Hieneman's proposal is simply a tax shift to selected sectors of the state’s economy and to lower- and middle-income Nebraskans.

“Nebraskans do not need a new ‘sick tax,’ nor will they benefit from higher property taxes," he said. "And, the potential damage to farming, ranching, rural health care facilities, students, the elderly, the disabled and hard-working, middle-class families make this proposal a bad deal for rural Nebraska.”

Heineman said he wants to represent the average people in Nebraska, rather than the bigger businesses that are interested in protecting their exemptions. He said average people include military retirees.

“We’re going to stand up and fight for those people,” Heineman said. “I hope the Legislature will join with me in standing up for the citizens in Nebraska.”