Editorial

Any tax break will be welcome

Thursday, May 17, 2007

An Associated Press story indicated that a tax-cut package approved by the Legislature on Wednesday "will cost $400 million over the next two years."

We'd prefer the phrasing "will save Nebraska taxpayers $400 million."

In any event, there is a lot to like about the plan, including the fact that Gov. Dave Heineman planned to sign it in the next few days.

The plan will eliminate the so-called marriage penalty which causes some couples who file jointly to pay more in income taxes than if they were single, a savings of hundreds of dollars a year, plus increasing the income-tax credit for low-income working people to equal 10 percent of the federal credit.

Lawmakers turned a deaf ear to a plea by Ernie Chambers and others to reduce the sales tax rate from 5.5 to 5 percent, where it was before a budget crisis a few years ago.

But the most important part of the plan is property-tax credits equal to 8 cents for every $100 of property value. As the AP story indicated, the owner of a $140,000 home would save $112 in taxes a year. That shift accounts for more than half of the $400 million savings over the next two years.

That should catch the attention of anyone in the Republican Valley, where LB701 allows Natural Resources Districts to assess 10 cents per $100 of property valuation to help pay for efforts to comply with Nebraska's obligations under the Republican River Compact.

Of course, the budget bill does nothing to offset the $10 per irrigated acre the NRDs also have the power to impose, but, depending on how much of their taxing authority the NRDs use, the new budget bill could provide a welcome break.

No, we won't be enjoying the tax cuts experienced by the rest of the state, but any amount of relief from the new taxes is appreciated.

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