On February 21, 2026, Governor Sarah Johnson of Nebraska unveiled a comprehensive tax reform plan aimed at addressing the state's budget shortfall and generating additional revenue. The proposed plan includes a number of strategies to modernize the state's tax system and make it more equitable for all Nebraskans.One of the key components of the Governor's plan is a proposal to increase the state's sales tax rate from 5.5% to 6.5%. This increase is expected to generate an estimated $150 million in additional revenue annually, which will help to fund essential state services such as education, infrastructure, and healthcare. The Governor emphasized that the sales tax increase will be offset by other tax cuts and credits aimed at providing relief to low and middle-income taxpayers.In addition to the sales tax increase, the Governor's plan also includes a proposal to eliminate certain tax loopholes and exemptions that benefit wealthy individuals and corporations. By closing these loopholes, the state stands to gain an estimated $50 million in revenue each year. The Governor argued that these measures are necessary to ensure that all Nebraskans pay their fair share of taxes and to level the playing field for small businesses.Furthermore, the Governor's plan calls for the implementation of a tax credit for working families to help offset the impact of the sales tax increase on lower-income households. The tax credit, which is estimated to cost the state $20 million annually, will provide additional financial support to families struggling to make ends meet.Overall, Governor Johnson's tax reform plan has been met with mixed reactions from lawmakers and taxpayers. While some have praised the Governor for taking bold steps to address the state's budget challenges, others have expressed concerns about the potential impact of the tax increases on families and businesses. The plan will now be debated in the state legislature, where lawmakers will have the opportunity to amend and refine the proposals before they are voted on.As Nebraska continues to grapple with fiscal challenges, Governor Johnson's tax reform plan represents a significant step towards achieving long-term financial stability and ensuring that the state can meet the needs of its residents. It remains to be seen how the plan will ultimately be received by lawmakers and taxpayers, but its unveiling marks a critical moment in the ongoing debate over tax policy in the Cornhusker State.