LINCOLN- On Wednesday, the Nebraska Legislature debated Sen. Linehan's LB754, a bill that would allow for around $3 billion in state income tax cuts. However, some critics of the bill argued that it would only help the wealthiest of Nebraskans. Sen. Lou Ann Linehan defended her bill, citing that 32% of the state's top income earners pay 80% of the state's income taxes, so it only makes sense to return the bulk of the state's budget surplus to them.

"I think we should give the money back to the people who actually paid the taxes," Linehan told her colleagues during the debate, "We have a lot of money because we didn't spend it. As long as we keep our spending below our revenue, we will be fine." If passed, LB754 would allow for a gradual reduction in the state's top individual income tax brackets and corporate taxes, with an end goal of 3.99% by 2027.

Sen. John Cavanaugh, in an attempt to make a compromise with Sen. Linehan, proposed that Nebraska should take the safer route, and instead aim for lowering the tax rate to 4.99%. "There is a downturn coming," Cavanaugh told his colleagues, "and we need to be careful about huge expenditures like this."

On Thursday, the Legislature continued to debate LB754, but passed the bill through its first round of debate on a 41-0 vote shortly before adjourning over the lunch hour. If passed and signed by the Governor, OpenSky Policy Institute, a Lincoln-based fiscal research organization, estimate that the tax cuts will benefit Nebraskans with household incomes above $138,000.

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