Nebraska near top in paying state, federal, local taxes

Tuesday, March 13, 2018

Are conservative politicians ogres who don’t care about children and the needy?

Is Nebraska living beyond its means when it comes to taxpayer-supported services?

That’s the debate that goes on every time the state budget is set, and especially this year when revenues aren’t keeping up with expenditures.

There are no doubt politicians at all levels can be guilty of catering to special interests at the expense of the average voter.

There’s ammunition today, however, for those who say Nebraskans are paying too much in taxes.

WalletHub released its yearly Tax Rates by State report confirming what the conservatives are saying. Nebraskans pay a lot when state, federal and local taxes are combined.

We’re ranked 49th overall in effective state and local tax rates, meaning we pay more in taxes than everyone except those in Illinois and Connecticut.

That’s $7,712 in total taxes per year on the median U.S. household.

Alaskans, by contrast, pay $3,164, Delaware residents $3,407 and Montanans $4,066 — we suspect energy contributes a lot to the state coffers in Alaska and Montana. The same can probably be said for Wyoming, which is the fifth lowest-tax state in the union.

But don’t Nebraskans have a lower cost of living that makes up the difference?

Not really, according to the folks at WalletHub.

Even with that factored in, we’re still the 39th worst state when it comes to taxes.

We’re in the middle when it comes to income taxes at 24, but 45th in real-estate taxes, 36th in vehicle property tax and 32 in sales and excise taxes.

While the State of Nebraska traditionally operates on a tight budget, there’s no doubt it could benefit from some of the same streamlining that private businesses have undertaken over the last few decades.

The state also benefits from the development of high-tech industries, especially in the east and along the I-80 corridor.

We need economic development to bring more quality jobs and taxpayers to our state, but therein lies the dilemma: how do we recruit companies when they know their workers will pay higher taxes once they get here?

That’s the daunting task facing state leadership: creating an attractive environment for both businesses and the employees they depend upon.

Now more than ever, efficient, intelligent use of every taxpayer dollar is key to our state’s success.


Check out the WalletHub taxpayer survey.

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  • These high tax rates are not a surprise to people who own property. Personally, i think it affects the growth of the state. It also affects the decisions of those who want to decide where to retire. Because you dont want all your fixed income going to taxes. It's strange that nothing is ever done to decrease taxes. They just keep increasing. Without having to look, I would bet that the states with the higher growth rates make their states attractive tax-wise. Nebraska never has and never will make an effort to better the tax situation.

    -- Posted by bob s on Tue, Mar 13, 2018, at 12:00 PM
  • Consolidation of school districts, counties and NRD’s would be a huge step in reduction of local property taxes. Taking a good look at colleges would be another wise move by the state. Specifically do we need a Peru State College when there are multiple colleges, universities and community colleges in SW Nebraska? Why is there a need for a liberal arts community college presence in towns with a four year college or university? I can understand a Vo-tech college in those locations but not a liberal arts institution. Bob is correct that people leave Nebraska to retire to states with no or very low income tax rates.

    -- Posted by dennis on Tue, Mar 13, 2018, at 2:10 PM
  • Based on Dennis's Peru State logic above, I can see he will be recommending the closing of McCook Community College. Why have a Jr. College in McCook and North Platte?

    You cannot believe what Peru State brings to Southeast Nebraska..

    Mick Haney, Peru State Alum..

    -- Posted by mickhaney on Fri, Mar 16, 2018, at 3:37 PM
  • I would venture a guess that the average travel time for a Los Angeles resident to LAX might be close to an hour. Thank you, rest of the country, for helping us enjoy a first class lifestyle when we cannot truly afford it ourselves! Sincerely, Southwest Nebraska.

    -- Posted by hulapopper on Fri, Mar 16, 2018, at 6:01 PM
  • The financial situation of Nebraska government budgets at all levels as well as residents and businesses are all between a "rock and a hard spot". In buying a used pick-up sales tax was over 7% - huge. It's actually like double taxation since the original owner also paid sales tax.

    The demographics are definitely not in favor of income tax revenues increasing.

    I think government service consolidation is at least a place to start as Dennis has suggested.

    Raising taxes will only discourage growth in business and population. Positive tax reform will be an enticement for both. It is one thing government can control since it takes some fairly rugged folks to endure the harsh environment of the Great Plains as well as the isolation.

    -- Posted by dameister on Sat, Mar 17, 2018, at 10:49 PM
  • Mick, first there are major differences between four year institutions and community colleges in programs and fundin and to me even the thought of closing MCC is not in the future. I am glad you are proud of your former school. It has a beautiful campus and you are correct that without the college of about 2200 students, including on line students, the town of around 800 would be in bad shape so the college does add to SW Ne. My high school, like many in the state is no longer open. I am still proud of it. The point for those closings were based in large part on lack of revenue. Peru has at least twice dodged the closing bullet in the past when the state was in revenue shortfalls. Just suggesting we look at ways to reduce the budget and closing PSU could be one of them.

    -- Posted by dennis on Sun, Mar 18, 2018, at 6:58 PM
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