Gov. Dave Heineman said today he will revise his $326.6 million tax cut proposal downward in response to legislative resistance.
Heineman outlined his proposal during his State of the State address in January. The plan called for expanding all four individual income tax brackets and lowering the rates in each bracket. The corporate income tax rate for income over $100,000 would be lowered to the top individual income tax rate, under the plan. Heineman also proposed eliminating the inheritance tax.
“I think we could do the full plan, if there were less spending,” Heineman told reporters during a conference call this morning. “But, at the moment, the legislature wants to spend more money than I would like and I’m a practical, pragmatic guy. I know you have to get to 25 votes, so we’re trying to work out, again, a more practical solution.”
The proposal to eliminate the inheritance tax attracted fierce opposition from county officials, which collect the tax and claimed its elimination would cripple their budgets.
Heineman acknowledged he would likely have to drop his insistence that the inheritance tax be eliminated.
“Would I rather it be in there, absolutely. Is it going to be in there? It doesn’t look like it. I can count to 25 real well and so I know what we have got to deal with here,” Heineman stated.
Other adjustments likely will be made as well. The legislative sponsor of the package, Sen. Abbie Cornett of Bellevue, is talking with fellow senators on what might prove acceptable. She likely will soon submit a revised measure.
Heineman insisted during the conference call that tax relief should be considered the top priority of the session. He said individual income tax rates need to be lowered.
“We have an income tax system that is very unfair,” according to Heineman. “As I’ve stated repeatedly, if your adjusted gross income is greater than $54,000 a year, you pay at the same marginal rate as Warren Buffett when he earns $54 million a year. That’s not fair. We need to correct that.”
AUDIO: Gov. Dave Heineman discusses the tax cut plan with reporters [5:30]