There are some states like New Hampshire, Florida, Texas, Wyoming, and Idaho that are consistently doing the right things for their citizens and ranking in the top tier of Your Survival Guy’s Super States. Then there are others who get it mostly right and some that, despite good intentions, seem to land in the middle of the pack.
Until recently, Nebraska has been a “middle-of-the-pack” state. Not terrible, but not top tier either. But lately the state, pushed by Gov. Jim Pillen, has been doing all the right things. This year Nebraska became America’s 27th permitless carry state when Pillen signed legislation into law protecting Americans’ Second Amendment right to protect themselves with a firearm in the state of Nebraska.
Now, Pillen has signed into law sweeping tax cuts that give Nebraskans back their own money, and will attract new business to the state. Pillen knows that if you want to increase your state’s population, you need to treat money with respect. The Wall Street Journal’s editorial board reports on Nebraska’s individual and corporate tax reform, writing:
The gulf between high- and low-tax states keeps growing, and Nebraska is the latest to use budget surpluses to cut income and property taxes—and in a big way.
Gov. Jim Pillen signed a trio of bills that will return more than $6 billion to taxpayers over six years, according to state projections. An income-tax cut will bring the top rate down to 3.99% from 6.64% by 2027, and a separate cut will slash the corporate tax to the same 3.99% rate from 7.25% today.
The cuts mean broad relief because both rates kick in at relatively low income thresholds: $74,260 for households and $100,000 for businesses.
Lawmakers also expanded the property-tax credit for homeowners and capped the pace of growth for the taxes that school districts impose on properties. Those changes amount to a $1.76 billion cut for property owners. At the same time, the state created a fund from other revenue to maintain budgets for schools and other property-tax recipients.
These measures build on the smaller tax cuts that former Gov. Pete Ricketts approved a year ago. Those cuts would have reduced the top rate on income by 70% less than the new reform, and the corporate rate by 57% less, offering $900 million in relief.
Mr. Pillen was smart to take advantage of the state’s $1.5 billion budget surplus in consecutive fiscal years. A two-year term limit for legislators has helped produce crops of increasingly market-friendly lawmakers. Interstate competition has also kept the tax pressure on.
In the year since Mr. Ricketts’s reform, neighboring Missouri cut its top rate on income to 4.95%, and Iowa followed up its recent flat-tax plan with additional cuts to property taxes. Mr. Pillen noted the trend in his 2022 campaign and promised bigger cuts. “Our tax policy chases our kids and grandparents out of the state,” he said in January. “We can’t grow Nebraska that way.”
More than half of all states have reduced their income-tax rates since 2021, as employment growth and consumer spending have helped tax collections soar. Fewer states have cut corporate rates. In slashing its tax on businesses, Nebraska will leapfrog its neighbors to boast the lowest rate in the region after zero-tax South Dakota and Wyoming.
The politics of tax cutting continues to be popular in the states, even if it isn’t in spendthrift Washington. Lower structural rates provide assurance for business while preventing new spending burdens that might not be met if there’s a recession. It’s a win all around.
Action Line: Is your state going in the right direction or the wrong direction? Does it treat your money with respect? If not, you may be ready to look for a better America. Start your search with my 2023 Super States, and keep Nebraska in mind. At this rate, the Corn Husker State might find itself in the top tier in 2024. Then, click here to subscribe to my free monthly Survive & Thrive letter.
E.J. Smith - Your Survival Guy
Latest posts by E.J. Smith - Your Survival Guy (see all)
- Wellington and Wellesley Funds Not Managed by Vanguard - September 22, 2023
- Remembering Jimmy Buffett: The Oldest Surfer on the Beach - September 22, 2023
- The Folly of Windmills from Nowhere USA - September 22, 2023
- NYC Rolling Out the Robocops - September 22, 2023
- Will the Fed Hold Up Its End of the Bargain? - September 21, 2023