Governor Ricketts announces bill to reduce income taxes
Posted by: Channel 8 Eyewitness News
"This is a bill that will gradually take our income tax from where it is at seven percent to get us down to under six percent to make us more competitive; to get us to grow Nebraska," Governor Pete Ricketts said Monday as he announced a bill that would lower the state income tax by about one percent over the course of eight years.
Papillion Senator Jim Smith is introducing it, and multiple small business owners stood in support of the measure, including an entrepreneur, Kurt Arganbright, from Valentine, Nebr., which is just over the boarder from South Dakota.
"South Dakota has no state income tax, lower property taxes, and low taxes in general," Arganbright said. "Valentine already has a small employee pool, and by Nebraska becoming more competitive from a tax standpoint, that gives us a better shot to grow that employee pool."
And from a small business manager in Omaha, Vernon Davis: "I know a lady who had three kids and was working a full time job and two part time jobs. That’s what we could do as a state is get people back time with their families."
Adrian Suarez, who owns a Subway franchise in Omaha, says he hopes the income tax cut can help him save a little bit more or invest a little more.
"Either way, that helps me and my business grow and helps me and my family be secure as well," he said.
But some people think small business owners are mislead in thinking this will help the middle class. Ricketts says the tax bracket would include someone earning around $29,800. OpenSky, a local research institute that did a study on the bill, says while this seems like a middle-class salary, it is actually referencing taxable income, so taxpayers would need to earn more than $36,000 to get the cut, and even then it would be small.
"On average, middle class tax payer would save about $40, but the wealthiest one percent would save almost $6000," the director, Renee Fry, said.
Fry says she’s worried the large chunk of revenue lost in this income tax cut will end up negatively affecting schools or hot-button property taxes. Ricketts, however, says cutting property taxes is still a priority, and he holds to his plan to keep K-12 education off the chopping block.
If you are interested in the whole report from OpenSky, click here.
Governor Pete Ricketts was joined by several business owners as he announced a new bill in support of income tax relief at a press conference Monday. His proposal, made with Revenue Committee Chairman Jim Smith, would provide a one-tenth percent income tax decrease a year, starting in 2020.
OpenSky Policy Institute Executive Director Renee Fry, who works with fiscal analysis, disagreed with the plan:
“LB 337 is unlikely to help struggling small businesses as many are unlikely to have enough income to receive any tax cut at all under the measure. Almost 90 percent of the tax cut would go to wealthiest Nebraskans," she wrote in a statement. "The bill also would reduce revenue needed to fund schools, public safety and other services that support our state’s businesses, such the Department of Economic Development. LB 337 also would reduce revenue that could help Nebraska lessen its reliance on property taxes, which is the top concern of Nebraskans when it comes to taxes."
Ricketts says property taxes are a priority to him as well, but says he’s trying to take some of the pressure off government-collected income taxes to help small businesses stay afloat.