Nebraska and Indiana’s Pursuit for Fiscal Responsibility: Jonathan Williams on The Hugh Hewitt Show

Hugh Hewitt spoke with ALEC President and Chief Economist Jonathan Williams about Nebraska’s economic competitiveness, the state’s inheritance tax, and how Midwestern states can attract residents and businesses through tax reform and fiscal responsibility.

The conversation began with Williams reflecting on his recent keynote address at the Platte Institute’s annual conference in Lincoln, where approximately 200 attendees gathered to discuss priorities for the upcoming legislative session. Williams pointed to Nebraska’s progress in reducing income taxes while emphasizing the competitive pressure coming from neighboring states.

“It’s great to be back with my friends in Nebraska and friends at the Platte Institute,” Williams said. “Nebraska is one of those states that’s been making some good gains in the right direction.”

Williams noted that South Dakota and Wyoming have no individual income tax, while Iowa and Missouri have pursued significant tax reforms. He also highlighted the potential for Kansas to make additional tax cuts, arguing that Nebraska must continue advancing its own reforms to remain competitive in the region amid outmigration problems.

“There’s not a lot of room for error,” Williams emphasized, pointing to the challenge of competing with neighboring states for residents and investment. “It’s a big issue in a lot of the states. Kansas has faced it. Nebraska is facing it. They’ve got a big out migration problem, and you and I have talked about a ton, is you fix that through tax cuts, common sense economic policy, and education freedom.”

Hewitt then turned to Nebraska’s inheritance tax, asking whether it discourages people from moving to the state or encourages existing residents to leave. Williams agreed, arguing that the tax can create a significant burden for families seeking to preserve farms and family-owned businesses across generations.

“It’s that last thing that kicks people out of the state and has them move to Florida or Texas or some other state that they were considering otherwise,” Williams explained.

He continued by noting that Nebraska remains one of the few Republican-led states with a state-level inheritance tax, which he believes undermines its efforts to attract and retain wealth.

“They love Nebraska; they don’t want to necessarily leave, but that’s going to kick people out,” Williams said. “It’s just an economic malpractice for any conservative state to still have a death tax on the books today.”

The conversation then shifted to Indiana, where Williams praised Governor Mike Braun’s emphasis on fiscal responsibility and the state’s approach to maintaining budget discipline. Williams highlighted Indiana’s balanced-budget framework as a model for other states seeking to control spending and strengthen their economic position.

“We encourage everybody to look at how your state balances this budget, and if it’s not as good as you’d like, hint, hint, Illinois, California, other states that have it on the books but don’t really mean anything. Take a look what Indiana did,” he said.

Williams argued that states must address spending before expecting tax reforms to deliver lasting benefits, adding that Washington could learn from states that have established meaningful fiscal safeguards.

“They get it right on the spending side, and then they can get it right on the tax side,” he emphasized. “Washington could learn a little bit from Indiana and states that do get it right, and a lot of other states could learn as well.”