Nebraska Governor Jim Pillen recently introduced to the state legislature a proposal which would cut the income tax rate from 6.64% where it is now, to 3.9% over the next four years. It would be one of the largest tax cuts in Nebraska history. The proposal would vastly reduce the income tax burden on Nebraska taxpayers and keep more money in consumers’ pockets. This proposal, if enacted, would make Nebraska more competitive with its neighbors, such as Iowa, which is also lowering its income tax rate to 3.9%.
Governor Pillen said: “Our tax policy chases our kids and grandparents out of the state,” the governor said Wednesday. “We can’t grow Nebraska that way.”
Estimates suggest that the personal income tax save taxpayers over $720 million dollars, if enacted. In addition to lowering the income tax rate for residents, the Governor’s proposal would reduce the corporate rate. Governor Pillen is also eyeing changes to funding and management of social services as part of this legislation. Gov. Pillen wants to eliminate taxes on Social Security, and the state to take over support for community colleges to replace property taxes. He also proposed offering a $25 million credit to certain organizations that provide scholarships to children who want to enroll in private schools.
In reference to his proposals, Governor Pillen said: “Our current tax system fails to make Nebraska competitive. If we are going to attract and retain people, we need to modernize our tax code and provide Nebraskans with the tax relief they need. My proposals will reduce our property, income, and business taxes to spur economic growth so Nebraska can remain, for future generations, the best place in the country to work and raise a family.”
Governor Pillen’s income tax cuts proposal and related changes to social services funding will help families and working individuals in a challenging economic climate, is friendly to parents seeking private schooling for their children and will include Nebraska amongst the 37 other states that do not tax social security.