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Expert Advises Nebraska Lawmakers Not to Tax Business Inputs

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LINCOLN, Neb. (AP) -- A sales-tax expert says Nebraska should avoid taxing equipment and raw materials that are used to produce consumer goods.

Indiana University professor John Mikesell told lawmakers Wednesday that the state should focus instead on taxing products once they're bought for household use. Mikesell says businesses that are taxed during production pass the expense along to consumers through higher prices.

His comments came during a meeting of the Legislature's Tax Modernization Committee, which is looking for ways to make Nebraska's tax system fairer, more efficient and competitive.

Mikesell says a retail sales tax driven by household consumption is a better way to finance government, and does less to stifle economic growth.

He also suggested taxing food, though lawmakers say that idea is a tough sell.

Copyright 2013 The Associated Press.

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