Tax Expert Warns Lawmakers to Move Cautiously in Tax Reform - KHGI-TV/KWNB-TV/KHGI-CD-Grand Island, Kearney, Hastings

A national tax–policy expert is urging Nebraska lawmakers to move cautiously as they prepare for a possible tax overhaul. Gov. Dave Heineman recently proposed the cutting of the state's individual and corporate taxes in his State of State address.

The governor's plan also includes a change in many of the state's current sales tax exemptions to cover the revenue lost by cutting income taxes.

However, University of Connecticut professor Richard Pomp says that sudden, dramatic changes to tax policy could have unintended consequences.

Pomp says eliminating the income tax would make state revenue more unstable and less predictable for policymakers, because sales tax revenue can fluctuate with the economy.