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Social security tax phaseout to affect 300,000-plus Nebraskans

Posted at 6:05 PM, May 21, 2021
and last updated 2021-05-21 19:06:24-04

LINCOLN, Neb. (KMTV) — The Nebraska Legislature just has two more days scheduled in their session, before they leave for the summer and come back in the fall for redistricting.

While the unicameral did not pass Governor Ricketts', priority number one property tax bill, they did pass a series of tax cuts.

“Frankly if you ask me seven years ago if we’d be able to get here today, I didn’t have much hope,” said State Senator Brett Lindstrom.

State Senator Brett Lindstrom of Omaha, says he’s been trying to eliminate the state’s social security since he got into office seven years ago.

“Ultimately it’s to put Nebraska in a competitive situation, with our surrounding states and not only maintaining retirees here but cultivating a tax structure and tax reform that puts us into a better situation to compete with our neighbors,” said Lindstrom.

Thursday, the legislature passed a bill that phases out social security taxes over ten years.

This year, taxes will be reduced five%, next year it will be 20%, in 2023 it will be 30% until it goes to 100% in 2030.

He says that will affect Nebraskans in every county and political party.

“Really it wasn’t a Republican, Democrat, urban, rural, this affects 300,000-plus people across the state,” said Lindstrom.

The money saved averages to about one thousand dollars a year for the average Nebraskan on social security. Many of whom live on a fixed income.

“So 1,000 dollars a year goes a long way for a lot of individuals whether it’s groceries, gas, spending on your grandkids,” said Lindstrom.

The bill is now expected to be signed by Governor Ricketts. Senator Justin Wayne was one of eight senators who didn’t vote on the bill at all.

He said Friday, next year he wants to evaluate the ‘Black tax’, specifically the hidden fees associated with being Black in Nebraska.

“I want to talk about the Black tax and how we eliminate or reduce that economic cost, so we could have a fair apples to apples conversation when we talk about property and farmers and businesses and their tax rate,” said Wayne, who represents parts of North Omaha.

The legislature also passed a bill today that cuts taxes on Nebraska's corporations. Supporters say they wanted a level playing field for both big and small businesses.

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