Major income, property, Social Security tax cut plan hits new roadblock in Nebraska Legislature | Local

A surprise amendment offered Friday morning would have incorporated other tax proposals into the bill. The amendment would have ratcheted down the state’s top corporate and individual income tax rates and expanded income tax credits offered to property taxpayers.

Lindstrom, a GOP candidate for governor, touted the package as the “biggest thing” in years and said Nebraska must make the proposed changes to compete with other states. But he said there will be more work on tax reform in the future. 

Another supporter, Sen. Tom Brandt of Plymouth, said fears about the tax measures putting Nebraska into a financial crunch down the road were overblown. By fiscal year 2024-25, the package is projected to reduce state revenues by $565 million.

“This is about ‘go big or go home,'” he said. “This helps all Nebraskans.”

But Sen. Tony Vargas of Omaha, a Democratic candidate for the 2nd Congressional District seat, questioned whether the state could afford all of the proposed tax changes. He also pointed out that a large population of Nebraskans would not see a tax cut from the proposal.

Those left out from income tax cuts include single filers making less than $40,676 or married filers making less than $81,352, unless they get Social Security benefits. The property tax credits would not go to anyone who does not own property.

Several opponents objected to packaging all of the tax measures together. The Social Security proposal enjoyed broad support during first-round consideration, but the income tax cuts have had a rougher road. Opponents blocked a separate income tax bill earlier this week.

Linehan said she is not sure yet what avenue supporters will use to get the tax package passed. But she warned that the state budget bills could be in jeopardy if lawmakers continue to stand in the way of the tax cuts. Lawmakers are slated to vote on passing the budget bills Tuesday.