Lawmakers in Nebraska have passed a bill that cuts income taxes and phases out the state Social Security tax.
LB873 cuts the top income tax rate from the current 6.84% to 5.84% by 2027. The corporate tax rate will also be gradually cut the 5.84% by 2027, and the bill additionally speeds the phaseout of Social Security income taxes.
The bill, introduced by Sen. Curt Friesen, R-Henderson, passed on a vote of 43-0.
“Over the past eight years, the Nebraska Legislature and I have worked to control government spending,” Gov. Pete Ricketts said in a statement. “It’s enabled the passage of the largest tax cut in Nebraska’s history.”
“I look forward to signing LB873 to return money to the hardworking people of Nebraska,” the governor added.
Jim Vokal, CEO of the Omaha-based Platte Institute, previously said he wanted to see more.
“While reducing taxes is certainly better than just spending the state’s excess revenues, senators repeatedly acknowledged a lot of work will be left unfinished if LB873 wins final approval,” Vokal said in a statement last week.
Pointing to other states including Iowa, Vokal said they are moving faster and more strategically on tax reform.
“If Nebraska waits until 2027 to fully implement the plan, our state will still have the highest income taxes among our neighbors, and will be spending more than $1 billion on tax credit programs with no guarantee that local property taxes will have been held in check over those five years,” Vokal said.
For taxpayers to get their money’s worth, the Platte Institute thinks the next Legislature and governor need to focus on tax modernization that gets to the root of Nebraska’s economic challenges.
“(That includes) growing our workforce by making Nebraska a better place for everyone to earn a paycheck, creating certainty for property owners by permanently reducing property taxes, and making Nebraska competitive with the rest of the country by ending outdated policies like the county inheritance tax,” Vokal said.
This article was originally posted on Nebraska lawmakers pass tax cut measure