Nebraska Lawmakers Kick Off Income Tax Bill Debate | Nebraska News

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LINCOLN, Neb. (AP) — Nebraska lawmakers clashed Wednesday over a bill that would cut the state’s top tax rates, an idea backed by conservatives and business groups but fiercely opposed by some lawmakers. progressives who presented it as a gift to high earners.

The bill would reduce Nebraska’s top personal income tax rate from 6.84% to 5.84% by 2025. It would also lower Nebraska’s top corporate tax rate from 7.25% to 5.84% by 2026.

Nebraska imposes the highest rate on taxable income above $64,430 for married couples filing jointly and $32,210 for individuals, according to the state Department of Revenue. Proponents of the bill argue that many middle-income residents earn far more than these amounts and therefore pay some of their taxes at the top rate.

“This is a tax cut for middle-class families,” said Sen. Lou Ann Linehan of Omaha.

Opponents counter that the tax cuts would give a much bigger advantage to the highest earners. They also note that the tax rate is only imposed on taxable income, not gross income. Taxable income is almost always lower because it includes credits and deductions.

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Senators also expressed concerns about the impact on state finances and how it might affect other taxes.

“I feel like we’re going to open a Pandora’s box that’s going to create more problems,” said Senator Carol Blood of Bellevue.

Lawmakers did not vote on Wednesday and will likely debate the bill over the next few days.

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