Poll: 78% of Nebraska voters favor ending county inheritance tax
Nebraska lawmakers are set to debate Sen. Rob Clements’ Legislative Bill 310, which would reduce the inheritance tax levied by county governments. Meanwhile, some legislators are supporting measures to end the inheritance tax altogether, including Sen. Joni Albrecht’s recently filed AM1511, which would phase out the tax by 2028.
A December 2021 Platte Institute poll of 812 registered voters in Nebraska provides a very recent sampling of what Nebraskans think should be done with the tax on property inherited from deceased relatives and loved ones, and their reaction to common policy issues related to the inheritance tax.
Through seven questions on inheritance taxes, which were part of a larger survey on Nebraska tax topics, we learned that Nebraskans of every party affiliation are supportive of eliminating the inheritance tax, with a majority expressing strong support for its repeal. The margin of error for this survey is 3.44%, and since polling results are rounded to the nearest figure, some of the totals won’t calculate to 100%.
When asking voters about inheritance taxes, we described Nebraska’s current economic situation compared to most states, which don’t levy an inheritance tax.
This was our first test of general support or opposition to the inheritance tax, which we’ll revisit at the end of the survey. To start, 73% of voters supported repealing the inheritance tax. 20% were opposed, while 8% were unsure.
Knowing only what they may know about the inheritance tax before this survey, and what we told them so far, the majority of Republicans, Democrats, and independents favor repealing the tax, and it’s safe to say their initial response is intense. 65% of Republicans, 41% of Democrats, and 56% of independents strongly supported repealing the inheritance tax, with another 15-18% of their counterparts somewhat supporting its elimination.
Thirteen percent of Republicans, 34% of Democrats, and 16% of independents opposed repealing the tax at the outset.
In this survey, the more Nebraskans learned about how the inheritance tax works, they more they became likely to agree it needs to be ended.
We began by describing how the inheritance tax is structured.
A common question is whether Nebraskans would find the inheritance tax less objectionable if they learned more about how it works. After all, there is no tax if a spouse leaves property to a spouse, and for immediate family members, the tax rate is 1%.
But 70% of respondents said knowing these facts made them more likely to want the tax repealed.
The inheritance tax has stayed on the books for more than 120 years in part because Nebraska is the only state that gave county governments the ability to collect this tax. In the Legislature, county opposition to repeal or reform of the tax is a major stumbling block.
But 66% of voters said the fact that only counties collect inheritance tax (meaning the state or school budgets aren’t impacted) is a compelling reason to get rid of it.
Seventy percent also agreed with the statement that a large influx of COVID relief at the county level makes now a good time to end county reliance on inheritance taxes.
This may be surprising, since the standard assumption by policymakers is that limiting local government limits local control prized by Nebraskans. In this case, though, most voters might feel the impact of the inheritance tax—whether on them personally or their sense of whether it’s right to impose—is more concerning than the funding it could supply to their county.
When concerns are raised about how repealing the inheritance tax might impact local property taxes, a segment of voters became somewhat less likely to support the change, but not enough to erase the majority held among each party affiliation supporting repeal.
Sixty-six percent of voters said the following description about inheritance taxes and property taxes made them more likely to support repeal, compared to 22% who said it made them less likely to support the change.
As a whole, 73% of voters were also more likely to support repealing the inheritance tax if Nebraska used a gradual approach to ending the tax over 5 years, which other states have used to phase out their own inheritance taxes. This position was favored by 81% of Republicans, 64% of Democrats, and 68% of independents.
Finally, we rechecked the original question about repealing the inheritance tax to measure how attitudes may have changed after voters were exposed to a number of arguments and aspects of the issue.
At the end of this survey, overall support for repealing the inheritance tax rose in every voter group, with an increase of 5 points, or 78% of voters, now favoring ending the tax. Opposition also shrank by 5 points.
After learning more about it, 53% percent of voters strongly supported repealing the inheritance tax, and another 25% somewhat supported the proposal. Fifteen percent of voters were opposed to repeal, 7% somewhat, and 8% strongly opposed. Seven percent were unsure.
In the final tally, repealing Nebraska’s county inheritance tax is supported by 86% of Republicans, 64% of Democrats, and 78% of independents.
These results suggest a strongly negative response to the idea of the inheritance tax on the part of most voters. That reaction only solidifies or even grows once the tax is explained and Nebraska’s position as an outlier is compared to other states.
For most voters, the question is not if Nebraska should have an inheritance tax, but when and how the state should get rid of it.
If repealing the inheritance tax was placed on the November ballot, this survey suggests the measure would have a very strong chance of passage. If the same measure proposed a 5-year gradual repeal of the tax, nearly three quarters of Nebraska voters would go into the polls feeling even better about it.
There may be lots of reasons lawmakers have avoided changes to the inheritance tax in the past, but going forward, voter sentiment shouldn’t be one of them. Lawmakers have a major opening to reach Nebraska voters in all parties by offering a vision that lays the inheritance tax to rest.
Learn more about Nebraska’s inheritance tax with these Platte Institute resources: