Nebraska lawmakers have passed a sweeping tax bill that would significantly cut the top income tax rate and eliminate taxes on Social Security benefits, in a move that could potentially provide a benefit to higher-income residents while also reducing the burden on lower-income households.
The legislation, which was approved by the Nebraska Legislature on Thursday, would reduce the top state income tax rate from 6.84 percent to 5.99 percent, while also ending the taxation of Social Security benefits. The bill had previously been approved by the state Senate, and was passed by the state House of Representatives on Tuesday.
The bill, which was championed by Republican Gov. Pete Ricketts, is expected to benefit high-income earners the most, as they are the ones who pay the highest income taxes. The bill would also mean a tax break for lower-income earners who receive Social Security benefits.
The bill is estimated to reduce state revenues by about $90 million in the first year and $110 million in subsequent years, according to the Nebraska Department of Revenue. The department also estimated that the bill would result in a net tax cut of about $50 million for the state’s top 1 percent of earners.
The bill has been praised by Republicans, who argue that it will help to spur economic growth by providing tax relief to businesses and individuals. Democrats, however, have expressed concerns that the bill could potentially harm the state’s budget and lead to cuts in public services.
The bill now awaits the signature of Gov. Ricketts, who is expected to sign it into law in the coming days.