The state is paying a price in terms of population and tax revenue due to its high taxation. Experts are concerned that while other states have found a solution, Nebraska has not.
Taxpayer migration is a phrase that seems a little perplexing.
The IRS tracks the travels of every person who submits a tax return, which is what it means. The movement between the 2019 and 2020 tax years saw 800,000 Americans move from one state to another.
The issue is that they won’t be visiting Nebraska.
In actuality, 4,200 persons and $500,000 in tax returns were lost to Nebraska as a result. While Idaho had a 36,000-person population increase and a $2 billion increase in tax revenue.
“They are moving in large numbers to states with lower income taxes, but other taxes also have an influence. According to Jim Vokal of The Platte Institute, “We have the eight highest property taxes, high auto taxes, we’re one of only five states with an inheritance tax, and the list goes on.”
Bryan Sloan declared, “This will be historic,” at a press conference held in April at the State Capitol. The passage of the largest tax relief package in state history was celebrated at that time by politicians from Nebraska, the Omaha Chamber of Commerce, business leaders, and state lawmakers.
David Brown remarked that day in the rotunda, “These tax cuts will make us so much more competitive.”
Along with other things, it gradually lowers individual and corporation tax rates over the following five years and eliminates social security income taxes by 2025. At the time, the Platte Institute, a Nebraska-based organization that protects taxpayer interests, preferred spending less money.
However, it issued a warning that it wouldn’t be sufficient and cited the most recent IRS statistics as yet another stark reminder that Nebraska keeps lagging behind and has to update its tax system.
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Although Nebraska is not in a position to welcome the hundreds of thousands of residents from other states, Vokal added, “We can manage how we tax people in Nebraska.”
The Platte Institute presented these proposals earlier this year to state legislators to make Nebraska more competitive with neighboring states, but they never made it out of committee. Part of them included eliminating inheritance tax and lowering income taxes for all taxpayers for the first $50,000 for a single tax filer and the first $100,000 for a married couple.