Legislative Bill 754 has advanced through its first round of debate in the Nebraska Unicameral Thursday, strongly, with a 41-0 vote.
The bill would gradually decrease the state’s top personal income tax rate and corporate income tax rate to 3.99% by tax year 2027…down from the current 6.27% which was slated to decrease to 5.84% as per a tax package passed in 2022.
LB754 supporters say the aim of the bill is to offer competitive tax laws compared to other states…with the hope that this would retain current businesses and individuals thinking of migrating away from the state, and attract those thinking of migrating to the state. Senator Lou Ann Linehan introduced the bill and often invoked that Nebraskans are over taxed. She said the passage of this bill would place Nebraska among the 15 lowest taxed states in the U.S.
“If enacted, LB754 would incrementally decrease both individual and corporate tax rates, and would put us much closer to the top, maybe as close as top 15 states for lowest personal and business income tax rates after full implementation of the bill.” said Linehan
This proposal is coupled with a property tax relief proposal, and if both pass, there would be a projected $3 billion in combined tax cuts over six years. Linehan brought this bill at the request of Governor Jim Pillen, who has backed both measures.
Opponents of the bill have argued that reductions for corporate & top personal income taxes are only going to be realized by the wealthiest Nebraskans. The Lincoln-based policy institute, OpenSky, has projected that three-quarters of the personal income tax benefit will go to the top 20% of Nebraska wage earners. Additionally, based on current corporate tax laws in Nebraska it’s estimated that 83% of the corporate tax cut will flow out of state. More specifically, Nebraskans with household incomes above $138,000 will see the bulk of the tax break. Households with taxable income under $32,950 would see no reduction.
“Senator Von Gillern says ‘Let’s give the money back to the people of Nebraska,’ and I say, let’s give the money back to the people of Nebraska…and let’s give it a little more evenly back… to the people of Nebraska.” said Senator Wendy DeBoer.
Omaha Senator Justin Wayne calling for more focus to be given to Nebraska’s most impoverished communities,
“But when we ask, can we get a hundred million dollars this year for North Omaha? The answer is no. Senator Linehan just got up and said, there’s $3 billion in surplus. How much has been committed to North Omaha? Zero. One of our most impoverished areas. Zero.”
On the legislature floor, lawmakers rejected 2 amendments put forth respectively by Senator John Cavanagh and Senator George Dungan. The bill ultimately advanced through the first round of debate, poised for a second round, and then a final vote.