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"I support the middle class tax cuts, because I believe it is critical to our economy to not over-tax hard-working lower to middle class Americans."

˜ Ben Nelson

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Working for TaxpayersWorking for Taxpayers

With a record of supporting tax reductions, balancing budgets, and controlling government spending, Nebraska’s Senator Ben Nelson has put into practice his belief that taxpayers know what to do with their money better than government bureaucrats. Since coming to the Senate in 2001, Nelson has advocated and played a key role in passing several tax cuts that were designed to put more money in the pockets of working families and spur a struggling national economy.

During Nelson’s time in the U.S. Senate, seven major tax cut bills or tax cut extensions have been signed into law. Senator Nelson supported all of them.

Senator Nelson played a vital role in both the 2001 and 2003 tax cuts. During 2001, he was one of a handful of centrist senators that helped craft the proposal to cut taxes by $1.3 trillion that was ultimately signed into law.

Since coming to the Senate, Senator Nelson has voted to extend important tax cuts, including legislation to mitigate the effects of the Alternative Minimum Tax on middle-income taxpayers; legislation to extend the capital gains and dividends tax cuts to keep the economy going strong; and extensions of tax breaks for the small business which make up the vast majority of Nebraska’s economy.

Senator Nelson also pushed for and secured passage of an important tax cut for Nebraskans: property tax relief for taxpayers who do not itemize their deductions.  In Nebraska, only one third of all taxpayers itemize their tax deductions, but the homeownership rate is over 67%.  Non-itemizers also tend to be lower and middle income families; for example, only half of taxpayers with incomes between $50,000 and $75,000 file itemized returns, compared to over 95% of those with incomes over $200,000.  Adding all this up, there are nearly 250,000 middle and working class Nebraskans who pay property taxes but have been unable to claim a deduction – until now.  Thanks to Nelson’s efforts, these Nebraskans will be able to deduct property taxes (up to $500 for individuals and $1000 for joint filers).

How do the tax cuts help you?

The tax cuts Senator Nelson has supported resulted in lower taxes for 656,000 Nebraska taxpayers. The cumulative impact of the 2001, 2003, and 2004 tax cuts (including the Economic Growth Tax Relief Reconciliation Act (EGTRRA), the Jobs and Growth Tax Relief Reconciliation Act (JGTRRA) and the Jumpstart Our Business Strength (JOBS) Act) has resulted in nearly $5 billion in tax relief for Nebraska taxpayers.

REDUCING TAXES

  • Approximately 650,000 taxpayers in Nebraska will have lower income tax bills in 2004 under EGTRRA and JGTRRA.
  • Over 175,000 business taxpayers in Nebraska are using their tax savings from the two Acts to invest in new equipment, hire additional workers, and increase pay.

NEW 10-PERCENT BRACKET
  • Over 590,000 taxpayers in Nebraska will benefit from the new 10-percent bracket enacted in EGTRRA and the JGTRRA acceleration to 2003 of the expansions of the bracket scheduled for 2008.

REDUCTION IN INCOME TAX RATES

  • 135,000 taxpayers in Nebraska will benefit from the EGTRRA reduction in income tax rates above 15-percent and the JGTRRA acceleration to 2003 of the reductions scheduled for 2004 and 2006.

REDUCTION OF MARRIAGE PENALTY

  • 225,000 married couples in Nebraska will benefit from the JGTRRA acceleration to 2003 of the EGTRRA provisions that increase the standard deduction for joint filers to double the amount for single filers and increase the width of the 15-percent bracket to twice the width for single filers. These two provisions were scheduled to phase in between 2005 and 2009.

INCREASE IN CHILD TAX CREDIT

  • 172,000 families in Nebraska benefit from the increase in the child tax credit under EGTRRA and the JGTRRA acceleration to 2003 of the increase from $600 to $1,000 that was scheduled to phase in between 2005 and 2010.

REDUCED TAX RATES ON CAPITAL GAINS AND CORPORATE DIVIDENDS

  • Nearly 100,000 taxpayers in Nebraska will benefit from the reduced tax rates on capital gains and corporate dividends under JGTRRA.

BUSINESS BENEFITS FROM TAX CUTS

  • 176,000 = The number of tax returns in Nebraska with business income benefiting from these tax cuts

SOURCE: U.S. Department of Treasury, Office of Tax Policy, March 20, 2007

Updated: May 2009