LINCOLN, Neb. (KMTV) — The Nebraska Legislature narrowly passed a massive reform package that lowers income taxes on many Nebraskans and all corporations.
“This package will be the biggest tax cut we’ve done, ever,” said Sen. Brett Lindstrom.
Those strong words coming from Senator Brett Lindstrom were echoed by others during the debate of a tax relief package in the Unicameral on Wednesday.
It was also repeated multiple times that this package is a compromise.
“We’re not going to please everyone, this is not going to be a perfect tax plan,” said Sen. Mike McDonnell.
Here’s what’s in the package: For single people making $29,000 or more, and couples earning $58,000 and more it would bring down the tax rate by 1% over the next five years.
It would bring down the corporate tax rate by over one percent after their first $100,000 by the year 2027.
It would also provide property tax credits and quickly phase out social security taxes.
“We’ve got to quit punishing people for making money. We’ve got to quit punishing people for having success. We need to encourage that,” said Sen. Mike Jacobsen.
Through votes on individual portions of the package, the majority of the body agreed with most of the tax package. But it was the corporate income tax cut that drew backlash from some senators.
“80% of that money goes to out-of-state corporations,” said Sen. John Cavanaugh, an Omaha Democrat. “So what that means it is not changing. They’re not going to not do business in Nebraska or do more business in Nebraska based off of that sales tax but they get 80 percent of that benefit.”
Lawmakers are pursuing the tax cut due to state revenues exceeding expectations by hundreds of millions of dollars.
Senator Megan Hunt worries about the future and believes politics would make it difficult for the future legislature to reverse course.
“We would never reverse a tax cut in this state for a corporation unless the state goes acute and is withering,” said Hunt.
Senator Tom Briese defended the corporate tax cut saying it’s higher than all of the states surrounding Nebraska and average Nebraskans could see lower prices.
“Tax savings of businesses operating here can be passed on to consumers in the form of lower prices,” said Briese.
Senator John Cavanaugh put together the fiscal notes of the individual bills that the package includes. Once fully implemented, he estimates that by the year 2027, it would cost the state over $900 million annually.