The state’s tax system is “upside down,” with low- and middle-income Nebraskans paying a higher share of their income on taxes than more affluent residents, a watchdog group said Tuesday.
The Lincoln-based OpenSky Policy Institute, citing a new national report, said that Nebraskans who are among the lowest 20% of wage earners pay an effective state and local tax rate that is 56% higher than those with the top 1% of incomes.
OpenSky, which assesses state tax and budget policies, warned that the disparity will grow as recently passed cuts in state income taxes are phased in or if the state shifts the tax load more heavily onto sales taxes.