LINCOLN--The Revenue Committee of the Nebraska Legislature heard testimony March 2 on a bill that would impose a flat state income tax rate in 2014 and eliminate a number of widely used itemized tax credits and deductions.
LB 620, introduced by Sen. Tyson Larson of O'Neill, would tax all individual earners at a uniform rate of 3.5 percent.
Nebraska currently has a progressive tax system, which taxes individuals at a higher rate the more they earn.
The bill also would reduce the tax rate on corporations to a uniform 4.5 percent. The corporate rate would then decline by .1 percent every year until 2024, eventually reducing it to 3.5 percent.
The current corporate rates are 5.58 percent and 7.81 percent.
Along with reducing the tax rate for many individuals, LB 620 would eliminate several tax credits and change certain tax deductions.