Income taxes probably meet the ability to pay principle better than any other tax. Many would argue that income taxes are even more equitable if applied with progressive rates and appropriate exemptions and deductions. This can result in the transfer of income from those relatively better off to those less well off, particularly with respect to social service programs. In addition, when considering a total tax system, income taxes can compensate for the weaknesses of sales and property taxes, neither of which is based directly on the ability to pay nor has progressive rates. However, income taxes may not be viewed as fair when considered from the perspective of benefits received.
Convenience is another desirable attribute for a tax.
Individual income taxes on wages and salaries are conveniently paid through withholding. Quarterly payments are required on other income that exceeds specified levels. From the standpoint of simplicity , Nebraska's individual income tax system has merit because it is based on federal adjusted gross income, from which relatively few adjustments must be made to determine Nebraska taxable income. Generally speaking, trade-offs exist between simplicity and fairness. Thus, any further moves toward simplicity may not be desirable in an overall sense.