Tax investment plan proposed
Published March 5, 2013
The Revenue Committee heard testimony March 5 on a bill that would fund public roads projects with private investment.
LB82, introduced by Columbus Sen. Paul Schumacher, would allow taxpayers to pay extra taxes in return for a future income tax credit. The revenue raised by the tax investments would be earmarked for highway construction projects.
Schumacher said it is disheartening for people who work to save money and not have a productive place to invest it. The bill would provide an infusion of needed capital for roads infrastructure, he said, in return for an inflation protected, T-Bill rate of return in the form of a credit against future tax liability of the saver.
“This is an effort to bring together a lot of forces and try to accomplish something,” he said. “This basically allows taxpayers to invest in Nebraska.”
The bill would require taxpayers younger than 62 to wait five years before claiming the credit. The waiting period would be waived for those over 62. The credit would be adjusted for inflation with an interest calculation equal to the T-Bill rate of return.
Credits would expire, unless claimed, 20 years after the underlying payment. In the case of death of the taxpayer, the credits would expire in five years.
Former state senator Loran Schmitt testified in support of the bill. He said it was a unique proposal that would work for Nebraska.
“We can expect the cost of construction to continue to increase,” he said. “Having money available for projects in the future is a solid plan.”
No one testified in opposition to the bill and the committee took no immediate action on it.