You’ll hear me talk about growing Nebraska frequently because it’s my vision for our state. Everything my administration does is focused on achieving this vision, which is inspired by the people of Nebraska. Whether it’s streamlining the application process for environmental quality permits to help businesses create jobs more quickly or launching our first-in-the-nation reemployment program to help jobseekers get back to work and find new opportunities, everything we do is about growing our state.
There’s one area in particular that I’m focused on during the legislative session to help grow our state, and that’s addressing Nebraska’s high tax burden. Our high taxes are no secret. Everywhere I travel in the state, I hear about our high taxes. Feedback from Nebraskans is confirmed by rankings which show that Nebraska’s income and property taxes need to come down to make our state more competitive. Bloomberg ranks Nebraska 16th highest for income taxes and USA Today rates us 5th highest for property taxes. This year, I have proposals before the Legislature to reform our property and income taxes. In this column, I will focus on my income tax relief proposal, and next week I’ll share more about property tax reform.
This session, I’m working with Revenue Committee Chairman Jim Smith on LB337. This proposal would take the top tax rate down roughly one-tenth of one percent per year. The top tax bracket starts for individuals with taxable income as low as $29,831. Tax relief would start in 2020, as long as the state’s revenue growth reaches 3.5 percent or more. In effect, Nebraska will have a trigger when the state hits 3.5 percent growth to take the top income tax rate from 6.84 percent down a little each year until it’s under six percent.
Income tax relief through LB337 is important for growing Nebraska for two key reasons. First, 90 percent of income taxes are paid by Nebraskans who pay in the top tax bracket, and that includes solidly middle class families making more than $29,831. Couples making more than $59,661 fall in the top tax bracket, and that’s more than half of them. Second, 90 percent of Nebraska businesses pay individual income taxes, according to the Nebraska State Chamber. These families and job creators have not seen the top rate cut in 20 years – this should not be a once in a generation event!
Recently, I held a news conference to unveil a coalition of small business leaders supporting LB337. At the event, small business leaders said income tax relief would allow them to reinvest in Main Street as well as expand hiring. They also argued that income tax relief would support talent attraction by making Nebraska more competitive with surrounding states. Right now, Iowa is the only one of our neighboring states that has a higher income tax. Two states, Wyoming and South Dakota, have no income tax at all.
At the same event we held with small businesses, a number of groups also announced their support for LB337. The groups include the Nebraska State Chamber of Commerce, Greater Omaha Chamber of Commerce, Lincoln Chamber of Commerce, Lincoln Independent Business Association, National Federation of Independent Business – Nebraska, Americans for Prosperity – Nebraska, and the Platte Institute for Economic Research. Altogether, these groups represent over 56,000 Nebraskans. This broad-based support is creating great momentum for income tax relief this year!
Income tax relief, however, is far from certain this session. Some special interests don’t want to see tax relief passed at all. If you want to see income tax relief become a reality this year, I encourage you to reach out to your senator to urge them to support LB337. You can find information on how to contact your senator by visiting www.NebraskaLegislature.gov. Also, if you would like to contact my office about this topic or any other, please email email@example.com or call 402-471-2244.