Iowa Senate advances tax relief, Nebraska should take note

Iowa Senate advances tax relief, Nebraska should take note

It’s no secret Iowa has high taxes and an outdated tax code. Their state legislature recognized that when it enacted a tax reform package in 2018 that phased in changes to modernize their tax system.

Iowa did a lot of what Nebraska lawmakers aim to do: Reduce top tax rates, expand the sales tax base, and remove outdated or irrelevant provisions left in the tax code from years past.

When fully implemented Iowa will have a lower top personal income tax rate than Nebraska (6.5% compared to Nebraska’s 6.84%). And while their corporate income tax rate will still be higher than Nebraska’s – Iowa found a way to cut their top rate from 12%, the highest in the nation, down to 9.8%.

The Iowa Senate built upon this historic 2018 tax reform package when they passed Senate File 576 which eliminates the revenue triggers in the original legislation and eliminates the inheritance tax. Although this provision still needs to be successfully voted on by the Iowa House before it becomes law, it sends a strong message to everyone in Iowa that the state is ready for more tax cuts and to be more competitive.

“Permanent tax relief gives small businesses and Iowa families confidence to work and invest in this state. It is a long-term pro-growth strategy to expand career opportunities and help Iowans keep more of their hard-earned money,” said Iowa Senate Majority Leader Jack Whitver, an Ankeny Republican.

These ideas are echoed by many in the Nebraska Legislature. Nebraska badly needs more people and workforce, more investment, and to reduce the disadvantage Nebraska faces on taxes compared with neighboring states.

This session Nebraska lawmakers have introduced legislation that (1) limits the annual growth of property tax revenue, (2) slightly reduces the high corporate income tax rate, and (3) modernizes the inheritance tax exemptions.

It is important for Nebraska to recognize that if we retain the status quo, we will be left behind, because everyone around us is moving in the other direction. Modernizing our tax code helps us keep pace with the economy of the 21st Century and also helps Nebraskans grow and prosper.

All the pieces for a quality tax reform package have received hearings in the Legislature this session – now it’s time to put it all together and deliver results for the people of Nebraska.

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