Nebraska corporate tax cut wins initial OK from lawmakers
OMAHA, Neb. (AP) - A proposed tax cut for corporations and a tax credit for parents grieving a stillborn child won initial approval Tuesday from Nebraska lawmakers, who criticized parts of the package but still gave it strong support.
The measure advanced 41-1 in the first of three required votes, after hours of public debate spread over two days.
The bill combines several proposals, including a gradual reduction in the top corporate income tax rate.
Backers argued that the top corporate rate, 7.81%, should be lowered to match the top individual income tax rate of 6.84%. Under current law, many small businesses in Nebraska are allowed to file as individuals rather than corporations. They also contended that lowering the top rate would make Nebraska more attractive for investment without having to offer large, complicated incentive packages.
“I would much rather see us treat everyone equally by lowering the overall rate,” said Sen. Lou Ann Linehan, the chairwoman of the Legislature’s Revenue Committee.
Sen. John Stinner, of Gering, said lowering the rate would help Nebraska recruit and retain businesses, but warned that lawmakers should do so incrementally to avoid future budget problems. Lawmakers may add a slower phase-in before giving the measure final approval, depending on how much money is available in the state budget.
Critics countered that the tax cut would mostly benefit large, out-of-state corporations that would likely do business in the state regardless. They said the lost tax revenue could go toward other priorities, such as lowering property taxes or toward education.
“This shifts money away from things that have a larger multiplier effect that corporate income tax cuts,” said Sen. John Cavanaugh, of Omaha.
Sen. Curt Friesen, a Henderson farmer and a leading advocate for lowering property taxes, said companies are generally more likely to move to Nebraska if they see an educated workforce, natural resources or an opportunity to gain market share in their industry.
“As long as they’re making money, I don’t think they care what they’re taxed at,” he said.
The bill would also provide a refundable tax credit for the parents of stillborn children. Supporters cast the proposal as a way to comfort grieving families, but opponents said it was a subtle attempt to undermine abortion rights by having the state recognize a fetus as a living human.
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