Open Sky Policy Institute: Most Nebraskans Left Behind by Income Tax Cut BillsITEP Work in Action
Non-Nebraskans, corporations and wealthy residents would be big winners under the latest income tax cuts proposed in in LB 938 and LB 939. Meanwhile, the bills – which would ratchet the state’s top corporate and personal income tax rates to 5.84% over four and three years respectively – offer most Nebraskans little tax savings while depleting revenue needed to fund services like schools, health care and public safety, which are the bedrocks of a strong economy.
According to Institute on Taxation and Economic Policy analysis, at least 83% of LB 938’s corporate income tax cut would flow to out-of-state taxpayers. This means only about $9 million of the bill’s $53 million corporate income tax cut would stay in Nebraska when the bill is fully implemented. About 84% of LB 939’s personal income tax cut would go to the highest-earning 20% of Nebraskans with about 29% of the tax cut going to Nebraskans with the highest 1% of incomes – those making $559,000 or more, the ITEP analysis shows.