Large tax breaks to the wealthy and out-of-state corporations have been amended into a bill to cut Social Security taxes and is currently being debated by the Legislature.
The bill – LB 825 as amended by AM 2514 – would:
- Phase in a full exemption of all Social Security income from taxation;
- Lower the state’s top personal and corporate income tax rates to 5.84% over the course of several years;
- Incorporate LB 723’s provision that sets the minimum level of the LB 1107 refundable income tax credit at $560 million once fully implemented; and
- Create a new refundable income tax credit for community college property taxes paid.
OpenSky estimates the measure would reduce state revenue by about $900 million annually by FY 2027-28. Revenue losses of that size would likely force future legislators to either cut funding for schools, health care and other key services or increase other taxes and fees to balance the state budget.
LB 825 is on the second-round of debate, which means it could be debated for four-hours today before going to a vote. Nebraska Public Media is streaming debate on the bill live.