Gov. Ricketts Unveils Coalition Supporting Income Tax Relief Small business owners support tax relief for hardworking, middle class Nebraskans. Organizations representing over 56,000 Nebraskans and organizations throw support behind the Governor’s plan
February 13, 2017
LINCOLN, January 30, 2017 – Today, Governor Pete Ricketts and small business representatives from across the state unveiled a coalition in support of income tax relief. The Governor’s proposal, introduced by Revenue Committee Chairman Jim Smith, would provide income tax relief to hardworking Nebraska families and small business owners.
“We are fighting for income tax relief for the hardworking families and business owners of Nebraska this legislative session,” said Governor Ricketts. “Their stories are why Senator Smith and I have prioritized income tax relief. High taxes are a barrier to growth and expansion. From Main Street in Valentine to the Silicon Prairie in Lincoln and in Omaha, income tax relief will help grow Nebraska. I look forward to testifying in front of the Revenue Committee to advocate for this plan, and working with the full Legislature to make tax relief a reality this year.”
Under LB337, Nebraska would take the top tax rate for individuals with taxable income as low as $29,831 down roughly one-tenth of one percent per year, starting in 2020, as long as the state’s revenue growth exceeds 3.5 percent. In effect, Nebraska will have a trigger when the state hits 3.5 percent growth to take the top income tax rate from 6.84 percent down a little each year until it’s under six percent.
“Thank you to the organizations who are throwing their support behind LB337 today,” said Revenue Committee Chairman Smith. “For Nebraska, income tax relief is one of the keys to growing our state. It’s no secret that high income taxes are a major hurdle for job growth and investment. I look forward to working with the Revenue Committee and full Legislature this session to deliver meaningful income tax relief with LB337 for hardworking Nebraska families and business owners.”
At the news conference, Governor Ricketts announced that the following organizations had endorsed LB337:
• Nebraska State Chamber of Commerce
• Greater Omaha Chamber of Commerce
• Lincoln Chamber of Commerce
• Lincoln Independent Business Association
• National Federation of Independent Business – Nebraska
• Americans for Prosperity – Nebraska
• Platte Institute for Economic Research
“To be competitive, Nebraska has to start reducing taxes now,” said entrepreneur and Omaha small business owner Adrian Suarez. “As a small business owner, I have to carefully watch and account for the smallest of details. When talking about a one percent reduction it can mean the difference between being able to grow and not being able to grow. One percent can be the difference between planning on reducing or adding jobs. On behalf of Nebraska small business owners and entrepreneurs, I urge the Legislature to act this session to reduce income tax relief by passing LB337.”
At the news conference, small business voices from Fremont, Hastings, Lincoln, Omaha, and Valentine highlighted the impact income tax relief would have on their businesses, communities, and families. Income tax relief would:
• Allow small business to reinvest and expand hiring.
• Support talent attraction by making Nebraska more competitive with surrounding states.
• Provide relief to the over 50 percent of married couples who fall in the highest tax bracket.
• Provide relief for many of the 90 percent of businesses in Nebraska that pay individual income tax.
“This is a great step to make Nebraska’s business climate more competitive with other states,” said attorney and small businessman Kurt Arganbright of Valentine. “The current top income tax rate impacts solidly middle class single and married taxpayers. This plan will keep more money in the pockets of the small businesses, many of which are small family businesses or sole proprietorships. Even incremental changes to make Nebraska more competitive can make a big difference for communities like Valentine looking to grow Main Street and expand opportunities for the next generation.”
ENDORSEMENTS FROM INCOME TAX COALITION MEMBERS
“The Legislature is directly responsible for the state’s income tax. Currently, Nebraska’s individual income tax rate is 16th highest in the country, a fact that is especially discouraging since more than 90 percent of all Nebraska businesses pay income taxes at the individual level. Our high income tax has negatively affected economic growth and job creation, and has hurt Nebraska families. Now is the time for the Legislature to focus on state income tax relief,” said Nebraska State Chamber President Barry Kennedy on behalf of their 2,000 members.
“We appreciate the effort and focus Governor Ricketts, the Legislature’s Revenue Committee, senators, and local officials are putting on reforming Nebraska’s tax structure. Reducing Nebraska’s income tax rate remains a top priority of the Greater Omaha Chamber. The burden of the income tax goes to households and employers across the state. Reducing this burden will leave more earnings in the hands of consumers. It will provide our businesses with more capital for rewarding employees. It will attract new employment and investment. It is one of the best ways we can grow Nebraska and advance the financial stability and prosperity of individuals, families, businesses, and aspiring entrepreneurs,” said Greater Omaha Chamber Chair Leslie Andersen on behalf of their 3,200 members.
“Our policy team in solidarity with both the Omaha and Nebraska Chambers believe the best way to accomplish growth in tax revenue is to do a better job of growing business. We are advocating a significant reduction of state income tax rates. A reduction in tax rates will help with the transfer of businesses and farms, will encourage our retirees to stay in Nebraska and attract more young people our cities and state,” said Lincoln Chamber President Wendy Birdsall on behalf of the organization’s 1800 members.
“For too long our state has been stuck in an outdated, stagnant tax code. While some want to double down on policies of the past, we are happy to stand with Governor Ricketts who has offered a responsible tax reform that points us in the right direction to making the Good Life even better,” said Americans for Prosperity Nebraska Director Matt Litt on behalf of their 45,000 members in Nebraska.
“LB337 is a reasonable approach to reducing Nebraska’s tax burden. In years when revenue growth is strong, Nebraska’s high personal income tax rate would be very moderately reduced without cutting a dime of spending. Responsible and much needed to be competitive and grow our state,” said Platte Institute for Economic Research CEO Jim Vokal.
“Most small businesses are pass-through entities, resulting in owners paying taxes on business income at their individual income tax rate. The Governor’s income tax relief proposal will allow small business owners to put the tax savings back to use in their businesses and help spur the state’s economy,” said National Federation of Independent Businesses State Director Bob Hallstrom on behalf of the association’s 4000 members in Nebraska.