In January of 2015 it seemed this legislature was determined to reform the Nebraska tax code to provide meaningful tax relief.  There were arguments about which tax should be lowered.  Oher arguments centered on how “much” to lower taxes.  The good news was – Senators and other officials were excited about the opportunity to lower taxes.

I recall my excitement about a bill that would eliminate the income tax on a “second” job.  As someone who holds down two jobs, it would be a major benefit having my part-time radio show on KFOR 1240, income tax free.

According to Senator Gloor, LB64 would help the economy.  He said, “The Nebraska economy is currently suffering from a lack of labor force. The issue can be addressed by investments that enable production with fewer laborers; by policies that encourage migration to Nebraska; or incentives for existing labor to take on additional employment.   A frequent criticism of the state income tax is that it is a disincentive to engaging in productive behaviors in Nebraska.  To the extent that is true, LB64 removes the tax disincentive to taking on a second job. The purpose of LB64 is to incent employees to take on an additional job and to ease the industrial suffering from a shortage of labor.”  The bill did not gain much support.

As of the publishing deadline for this article, we are near the end of the 90 day legislative session and there is still no progress toward meaningful property tax relief.  The only property tax relief achieved is through a tax shift to the Property tax Cash Credit Fund whereby the state collects Nebraskan’s wages via the income and sales tax then uses them to pay a small portion of individual’s property tax.

It is time for the Legislature to turn its focus to lowering the personal and corporate income tax.

Lowering the income tax:
• Encourages wealth creation in Nebraska,
• Helps retain Nebraska businesses,
• Attracts and retains skilled and professional workers in Nebraska, and
• Gives Nebraska an advantage in attracting good paying jobs.

LB 357 introduced and prioritized by Senator Smith and currently held by the revenue committee provides meaningful tax relief using a measured incremental approach.  It does not shift the tax burden but reduces it for all Nebraskans.  Property tax relief has proven beyond the grasp of the state legislature. It is impractical for a body that does not impose the property tax to meaningfully reform it.

Therefore, it is time for the legislature refocus and to concentrate on providing tax relief through reform of the state income tax.

 LIBA studies and promotes these types of issues that are important to businesses and our community.  If you have an interest in joining LIBA, please call me at 466-3419.  LIBA membership is not restricted to just businesses.  We also have “individual” memberships for those who want to help influence our local government decisions.