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Report: Nebraska's tax burden 17th in nation

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By NANCY HICKS / Lincoln Journal Star

Thursday, Aug 07, 2008 - 09:22:14 pm CDT

Nebraska’s local and state tax burden hasn’t changed much over the decades.

For much of the past 18 years, Nebraskans, in general, have paid about 10 percent of our income for state and local taxes, based on an annual study by the Tax Foundation.

This year is no exception.

Story Photo

Nebraska ranks 17th this year in the nonpartisan, nonprofit Tax Foundation’s annual tax burden study and state ranking.

The state’s tax burden is 9.8 percent of income, just marginally above the national average.

Nebraska paid an average $3,983 for state and local taxes, based on $40,499 per capita income, according to the study.

Nebraska’s tax burden is lower than last year and is the lowest since 2002.

At the top is New Jersey, where 11.8 percent of residents’ income goes to state and local taxes, according to the study.

Alaska’s burden is the least, at 6.4 percent.

Nebraska is part of a clump of 15 states that show very little difference in tax burden.

All are hovering around the national average of 9.7 percent.

The Tax Foundation’s annual tax burden is determined by calculating the amount paid by residents in taxes, which is then divided by total income.

The annual tax burden can be affected by rising income, as well as by tax rate reductions.

Nebraska’s burden dropped this year, as did the local and state tax burdens in many states, primarily because income growth outpaced tax growth, according to the study.

Nebraskans’ taxes aren’t growing as fast as their personal income is growing, said Bill Lock, a staff member of the Legislature’s Revenue Committee.

The Bureau of Economic Analysis reports Nebraska has seen a 6.5 percent growth in personal income, he said.

In addition, the governor and Legislature eliminated the marriage tax penalty from the state’s income tax system and reduced the estate tax in 2006.

Nebraska’s ranking changed slightly from last year, when the state was 18th from the top.

The state generally ranks between 10th and 22nd. The Tax Foundation has monitored fiscal policy at the federal, state and local levels since 1937.

The foundation reported Nebraska ranked sixth in the early 2000s, but that ranking was based on inaccurate data, Lock said.

The foundation subsequently changed the state’s tax burden and ranking for that year, based on more accurate information.

The Tax Foundation bases its study on Census Bureau data. Its calculations also reflect local and state taxes paid in other states.

For example, the study works to reflect the amount of sales and lodging taxes Nebraskans pay when they vacation in Las Vegas.

Reach Nancy Hicks at 473-7250 or nhicks@journalstar.com.


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Lincoln tax payer wrote on August 7, 2008 2:30 pm:
" Well lets look at the states next to us, Iowa-31st, Missouri-32nd, Kansas-21st, Colorado-34th and South Dakota-45th.
What's wrong with this picture.
I know Nebraska is bigger and has no tourist attractions but that is about the only differences. "

 Jeorge wrote on August 7, 2008 2:42 pm:
" Nebraska is smaller in population than those states around us. so each person has to pay more. At least we know we are not the highest like all the bloggers here would like to make us think. "

 frustrated wrote on August 7, 2008 2:44 pm:
" "I know Nebraska has less population than Iowa, little/no destination tourism like south dakota, less population and no destination cities like missouri, less poulation an no exportable natural resources like kansas, isn't a net exporter of natural resources (coal) thereby allowing others to pay their taxes like wyoming, AND on top of all of this, we rank in the bottom 10 in state rankings for spending, but that is about the only difference - why are we taxed so much more than everyone else?" "

 Taxes wrote on August 7, 2008 2:48 pm:
" and ruled by Republicans. What gives? "

 Seventeenth wrote on August 7, 2008 2:50 pm:
" Really? 17th??? With all the complainers screaming about how bad it is in Nebraska you'd think we would be in the top 10. Or top 15. But 17th?? Looks like you complainers will have to think up something new.

Naturally, the first complainer has to base everything on neighboring states. Anything to make it worse than it really is, huh? Gotta love it. "

 Ted wrote on August 7, 2008 2:51 pm:
" Nebraska is a low income state. It should have low taxes. "

 Tax Happy wrote on August 7, 2008 2:56 pm:
" I was depressed about Nebraska's high taxes, but not now, I feel so much better that I'm average. Time to celebrate, go to Iowa enjoy some gambling and a fine dinner. "

 Ridiculous wrote on August 7, 2008 2:57 pm:
" This is ridiculous considering this states gives so very small amounts of aid to underprivileged and we have very few public program. Our roads are crap,too. Where is all the money going? Rather than figure that out, perhaps I should just move to a state that allows entertainment venues (tourists attractions) to be built. Nothing to do here but pay taxes apparently. "

 taxpayer wrote on August 7, 2008 2:59 pm:
" Iowa has more people and casinos, Missouri more people and considerably more industry, Kansas has oil and natural gas, Colorado has more people and more tourist, and South Dakota has casinos and poor roads and schools.
Our problem is we have too much government. We need to eliminate some of our way too generous welfare programs. We have more government than we can afford. Govenment does not owe people a living. "

 Kristine wrote on August 7, 2008 3:01 pm:
" Is everybody READING this? Because perhaps you can all get your facts straight now about Nebraska taxes, and the constant inference that Nebraska is one of the highest taxed states. Is it? Really? Now be quiet. "

 nebr wrote on August 7, 2008 3:02 pm:
" Nebraska's population doesn't grow because they tax people out of the state exacerbating the problem. And with ag getting all the breaks and writeoffs the tax burden falls primarily on a relative few. "

 Jeff wrote on August 7, 2008 3:03 pm:
" With all the complaining here every day this should surprise quite a few people who will probably still not beleive it. We're at about two thirds. A third of the states in the US are taxed higher than Nebraska, but I bet we're still in the top ten for complaining about it! "

 Farmer wrote on August 7, 2008 3:28 pm:
" What about property taxes?? If we include those, we would probably rank nearer the top in taxes. "

 SO IRRITATED wrote on August 7, 2008 3:45 pm:
" I'm going to guess that the tax burden probably has something to do with the number of people of welfare in this state. The entire welfare system is a sore spot with me as I am a member of the "working poor". I am forced to watch lazy, irresponsible people collect welfare, medicaid and foodstamps while my own children go without simply because I have dignity, a sense of responsibility and choose to work. Then to top it off, the state takes a chuck of my earnings! Nice, real nice! Let's just continue to reward worthlessness while taking the hard earned money of those who work - pretty sure we'll be in this same "tax burden boat" ten years from now. "

 JRP wrote on August 7, 2008 3:51 pm:
" I'm with farmer. Does this include property taxes as well? The median house price in Lincoln is around $200K per year, putting taxes around the $4K/year area. This means family income would have to $40K per year just to be at the 9.7 % this survey puts us at! Something is very wrong in their calculations. "

 To Farmer wrote on August 7, 2008 3:51 pm:
" Um, follow the link and look at the report. They DO include property taxes. "

 jmk wrote on August 7, 2008 3:52 pm:
" They did not factor in property taxes, or car taxes, that would have put us close to the top "

 RL wrote on August 7, 2008 3:55 pm:
" So who said Nebraska can't grow? Guess who? Figures don't lie. My
state income tax and property tax in Nebr. last year was 15.45% of my
income. And that isn't considering the auto tax. On the same income
in the state I moved from the tax would have been 6.15% which doesn't
consider auto tax, which is more than half LESS than Nebraska. Three
companies I tried to get to open up in Lincoln and they reported back
to me, because of taxes, no thank you!!! The company I worked for was
licensed in all the surrounding states of Nebraska, but would not license
in Nebraska because it cost them too much to do business here and the
state did not grow. Goodness, and that was years ago and still are not
licensed in Nebraska!! And I did all the states we were licensed in
corporation taxes, so I understood the company's decision. And if you
don't think the 15.45% tax that has cut into my income hasn't LOWERED my
way of living, think again!!!!!! "

 Tim wrote on August 7, 2008 3:57 pm:
" 17th in Tax Burden, 43rd in Business Climate.

http://www.taxfoundation.org/research/topic/41.html "

 RE jeorge wrote on August 7, 2008 4:13 pm:
" What? Nebraska is smaller in population than wyoming,south dakota? I don't think so! I moved out of nebraska and into a smaller town in another state that touches nebraska. Our economy is helped by tourism. On the other hand what makes any difference what helps whether its farming or tourism? I live on less money being retired. It costs me about 1/3 of nebraska for taxes on cars , boats, home, gas. Now this state has a larger population but that inturn has more people in poverty who get government assistance. It costs to pay for them. How do they do it? They elect officials from the state house down to the school board who look out for the citizens..............period. "

 Also... wrote on August 7, 2008 4:35 pm:
" I contacted Sebastiani Winery in California and asked them why I couldn't purchase Sebastiani wine in Nebraska, and they said Nebraska charges so much for a license for them to sell their wine here that it just was not fiscally conceivable to sell their wine in this state. Guess it's not just taxes. "

 realistic wrote on August 7, 2008 4:38 pm:
" So let's look at the numbers:
per capita income tax burden rank
National averages 44,254 9.7%
NEBRASKA 40,499 9.8% 17
Iowa 38,636 9.3% 31
Kansas 40,784 9.6% 21
Missouri 38,084 9.2% 32

I only pulled a few of the stats but do you see what I am seeing??? Iowa's per capita income is less than ours, same with Missouri and the tax burden is not that much different. So wages must be ok here if the average is higher than everyone on my list except Kansas...now I will say Colorado has a much higher per capita income $53,163, don't they also have a couple of professional sports teams?

Based on NE per capita income the dollar difference between Missouri's rate per capita and NE's is only $243. ($40,499 x 9.8% = 3969 / $40499 x 9.2% = 3726/ 3969-3726=243) That is less than a $1 a day difference.

Get a grip people, would you rather live in California where the per capita income is $47,706 and the tax rate is 10.5% or New York with a whopping 11.5% (income $55,036).

I think I will stay in Nebraska it looks like I was right and it is not that bad after all. "

 NEucks wrote on August 7, 2008 4:48 pm:
" When I retire from OPPD in a few years, I am moving out of NE strictly because of the taxes. Maybe to Nevada where they don't have state income taxes and I can help to get Dingy Harry out of office with my vote. "

 Seriously wrote on August 7, 2008 5:38 pm:
" The picture isn't complete until you factor in the level of progressivity in state and local taxes. Nebraska's tax structure has very little progressivity because most are set on the same flat rate for everyone. Moreover, whena the feds reduce the income tax rate for the very rich it not only shifts a greater share onto those with less income nationally, but does so in Nebraska as well. The majority of Nebraskans would greatly benefit under a policy like that in Florida and Texas where every homeowner gets a basic, roughly $25,000, homestead exemption. This would help more renters qualify as homeowners, which is good for the community -- and would give some relief to owners of average homes for whom Lincoln Public Schools' tax levy is the ever-expanding black segment in our mortgage payements "

 look out wrote on August 7, 2008 6:04 pm:
" This report will feed into the need of politicians to raise taxes because our budgets are short this year! HAHA Nebraskans "

 Quit whining wrote on August 7, 2008 6:14 pm:
" The state is run by "Anti Tax" Republicans. Is this an oxymoron or a I just the moron. Keep voting Republican and maybe we can be #1 like the Huskers. Go Big Red, the state that is.... "

 hey NEhucks wrote on August 7, 2008 7:12 pm:
" Why would you want to move to a state with lower income taxes when you retire? Income taxes aren't the problem when you are talking about retirement pay. I bet half your retirement pay, if you include Social Security, won't be taxable anyway. You'll have an extra exemption at age 65 for state tax purposes too, once you reach that age. Now if you move to a state with a higher sales tax, they're not going to care where your money came from. They're going to tax it when you spend it. "

 whatever wrote on August 7, 2008 8:09 pm:
" 33 states are taxed less at the state and local level "

 Will James wrote on August 7, 2008 8:32 pm:
" A critical point remains: Composite Nebraska taxes(sales, income, real estate, vehicle) continue to rank the state as extremely high taxing compared to all of our neighboring states. Far higher taxes than lower population states such as South Dakota and Wyoming also much higher than more populated states such as Missouri and Colorado. "

 JB wrote on August 7, 2008 8:53 pm:
" Nebraska has average taxes. Some people act like we have the highest, but they don't know what they are talking about. Nothings is free. No oil money here like Alaska to subsidise our taxes. "

 John wrote on August 7, 2008 9:04 pm:
" Want low taxes move south. If you had ever lived in one of these southern states you will see what low taxes get you. Bad roads, crapy schools, and no real government. "

 And wrote on August 7, 2008 9:18 pm:
" If the neighboring states are so great, tax-wise, why are you living in this "terrible" state? Why? Why? Why? Certainly you can get a comparable job, correct? Certainly you can enroll your kids in comparable schools, correct? Certainly housing would be exactly the same or better, correct? So why not move??? I don't get it. Why not move???? "

 The good life eh wrote on August 7, 2008 10:16 pm:
" It is interesting to me that the states surrounding NE have legalized gambling and lower taxes. Millions of NE dollars go to pay down the taxes of other states because the voters here are clueless.

I came here to get my degree. For a while I thought it might be a good place to raise a family. Now, I can't wait to finish my degree next year and get out of the backwards state. Not only will I make more money, I will pay less state taxes. Don't even get me started on property taxes.

The good life? heh, I guess that phrase was coined by someone who never saw the ocean and likes giving their money to the state government. "

 goldwater wrote on August 7, 2008 11:02 pm:
" Mark Twain once said, "There are three kinds of lies: lies, damn lies, and statistics." What kinds of taxes were included in the study? Wheel taxes? Cigarette taxes? Fees charged to do businees in Lincoln/Nebraska? And how was the income level averaged. Fact is, that Lincoln's poor and working classes have not seen their wages raised while their living expenses and taxes have gone up. It's ok, I guess if the upper classes don't feel the squeeze. They are the only ones who count. If LJS wants to print a "feel good" article like this they need to report the methodology. The devil is in the details. Lincoln's workers are suffering from rising prices on everything and their tax burden, while the top earners find tax dodges/shelters/deductions. Don't tell me the tax burden for workers isn't enormous here and harder to cover, as the price of everything rises, while they still earning 1970's wages and watch jobs disapear to China, India, and Mexico. "

 WHAAAAAAAAAAAAAAT wrote on August 7, 2008 11:53 pm:
" 17th? We won't rest until we're #1. We're #1. We're #1. Cause we're the BIG RED of Nebraska and we like to be the bestest and the mostest. Who has the mostest speed limit? Huh? HUH?

We're #1. We're #1. We're #1 "

 nebluver wrote on August 8, 2008 5:41 am:
" I am so tired of hearing all the whining about Nebraska taxes. If you are really that unhappy here you need to leave. Good luck finding the same great quality of life anywhere else in the United States. We are privelidged to have some of the best schools, lowest crime rates, cleanest air, and greatest family atmospheres in the world. Oh yea, don't forget about Cornhusker football and all the other great sports and culture our university brings us. People take so much for gramted. I for one would double my taxes if I could gaurantee this slice of heaven will still look the same for my kids and grand-kids when they are raising families here. Grow up and realize what a treasure you have right here in Lincoln, Nebraska. Not just the good life, the great life! "

 be real wrote on August 8, 2008 5:59 am:
" Did you pay any attention to this in the article? And those figures are from 2004, before they re-evaluated the properties a couple of years ago and raised my property taxes 21%! Let's be real people.

Nebraska Property Taxes: Comparatively High
Nebraska is one of the 37 states that collect property taxes at both the state and local levels. As in most states, local governments collect far more. Nebraska's localities collected $2,004,782,000 in property taxes in fiscal year 2004, which is the latest year the Census Bureau published state-by-state property tax collections. At the state level, Nebraska collected $2,336,000 in property taxes during FY 2004, making its combined state/local property taxes $2,007,118,000. That brings its per capita collection to $1,148, ranking 16th highest nationally. "

 JCB wrote on August 8, 2008 8:49 am:
" Other then Wyoming, Nebraska's taxes are almost the same as the surrounding states. The state is one tenth % above the national average. Get tired of people who have never lived anywhere else complaining. To much tunnel vision in Nebraska. "

 Leave I dare you wrote on August 8, 2008 9:30 am:
" I live in rural NE. I had a job offer in Loveland Colorado. I would have recieved a $15K/year raise. But, by the time my house payment doubled for an ugly tract house, my car insurance skyrocketed, my kids went from a 15:1 student:teacher ratio to 25:1, and all the other "benefits" that came with moving to the front range, I decided "The Good Life" and its slightly higher taxes were worth it. I can always visit the mountains, don't have to live in their shadow to enjoy them. "

 Dr Juan wrote on August 8, 2008 9:49 am:
" I've lived out east... wanna complain about roads... yeesh. I visit my parents in Mesa AZ... nothing green there, no real seasons... and who builds a six million person city in the middle of a desert with no water?

There are better places to live than Nebraska. When you're young you want to be where the action is... so go be there. Some of you will miss 'home' reguardless of taxes, you'll bring your young spouse and kids back to be raised in an environment that is more than taxes, more than "Repulican or Democrat', more than professional sports team or casinos. Nebraska is just Nebraska, a state with people who wave to you for no reason as you cruise down the road, a place where people tolerate you even if you don't go to church with them.

The taxes are what the people will tolerate. No more and no less. "

 Grumpy Nebraskan wrote on August 8, 2008 10:44 am:
" Nebraska's taxes are negligibly above average? I knew I were getting ripped off, daggum it! Lousy Guvment. What good is it? Why, I lived in 37 different states before moving to Nebraska, and all of them were below average in taxes. Where I lived ain't yer business, but every city I lived in was flowing with milk and honey, had no potholes in the streets, and manna fell from heaven every day. Where's my manna, Nebraska? "

 Alan wrote on August 8, 2008 12:57 pm:
" Now just wait a dog gone minute here.

The article says, "Nebraska paid an average $3,983 for state and local taxes, based on $40,499 per capita income"

Per capita means "per person", they are saying that the average icome of every man, women and child in the state is $40,499 of which $3,983 is paid in taxes! So the family of four living in the $200K home is living off $161,996 per year and is paying $15,932 for the priviledge of living in Nebraska. Were that true in my case you'd never hear me complain about NE taxes.

The annual income for my two member household is only a bit more than $40,499 and my contributions to state and local taxes is well over $3,983 a year. My total tax burden should be under $2000 per year under this metric while my property tax alone is well over $2000. These numbers don't reflect reality. "

 Right on Dr Juan wrote on August 8, 2008 3:13 pm:
" Dr. Juan's got it right. Although I'll probably leave after college, I'm sure I'll be back sometime down the road. "

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