The Revenue Committee heard testimony Jan. 30 and 31 on seven bills that each would exempt some or all retirement income from taxation.<\/p>\n
Currently, income tax is levied on social security benefits above set levels \u2014 $25,000 for single people and $32,000 for married people filing jointly. The proposals included:<\/p>\n
\u2022 LB17, introduced by Omaha Sen. Jeremy Nordquist, which would raise the base levels at which social security benefits are taxed to $60,000 for single persons and $80,000 for married couples filing jointly;
\n\u2022 LB74, introduced by Fremont Sen. Charlie Janssen, which would exempt all social security benefits from income taxation;
\n\u2022 LB238, introduced by Bellevue Sen. Sue Crawford, which would exempt portions of both social security benefits and retirement income from state income taxes;
\n\u2022 LB5, introduced by Omaha Sen. Bob Krist, which would exempt all social security and military retirement benefits from income taxation;
\n\u2022 LB75, introduced by Janssen, which would exempt military retirement benefits up to $24,000 per individual and $48,000 for married couples filing jointly; and
\n\u2022 LB176, introduced by Papillion Sen. Jim Smith, which would phase in an income tax exemption on all military retirement benefits over a 10-year period; and
\n\u2022 LB227, introduced by Papillion Sen. Bill Kintner, which would phase in an income tax exemption on all retirement income over a three-year period.<\/p>\n
Nordquist said the current base levels were set in 1984 and have not been adjusted for inflation since. He said his bill is about achieving a level of tax fairness.<\/p>\n
\u201cWe want to create a more tax friendly climate for retirees in Nebraska,\u201d Nordquist said. \u201cPutting money in their pockets will create immediate economic activity.\u201d<\/p>\n
Krist said retaining military retirees \u2014 many in their 40s and 50s upon retirement \u2014 should be a priority for the state.<\/p>\n
\u201cWe have an incredible brain trust in the military and that needs to stay in Nebraska,\u201d he said. \u201cNo matter how we get to that point, we need to get there this year.\u201d<\/p>\n
Roger Rea, president of NSEA-Retired, testified in support of the bills. He said retirees put their money directly back into the economy and that money should stay in Nebraska.<\/p>\n
\u201cRetirees represent a huge economic engine in the state,\u201d he said. \u201cIt\u2019s time to return the money to its rightful owners \u2014 the recipients of social security benefits.\u201d<\/p>\n
David Drozd, research coordinator for the University of Nebraska at Omaha\u2019s Center for Public Affairs Research, testified Jan. 30 in a neutral capacity. He said if retirees continue to leave the state at current levels, the loss in population could have far-reaching effects.<\/p>\n
\u201cIf people aged 55 to 74 continue to move out of the state at current rates, they will likely take a Nebraska congressional seat with them,\u201d he said.<\/p>\n
OpenSky Policy Institute executive director Renee Fry opposed income tax exemptions. She said empirical data does not support the assertion that retirees leave the state because of income taxation on social security benefits.<\/p>\n
\u201cThe research fails to find any correlation between migration and taxes,\u201d she said. \u201cIt\u2019s a slippery slope when you start to carve out exemptions for one group and not another.\u201d<\/p>\n
The committee took no immediate action on any of the bills.<\/p>\n","protected":false},"excerpt":{"rendered":"
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