Feb 11, 2015

In Fiscal Year (FY) 2016, Nebraska collected $9.8 billion in state and local taxes—or $5,140 for every man, woman, and child. While this is an impressive sum of money, it tells us little about whether or not the average Nebraska taxpayer can afford this level of taxation?

To better answer this question, this analysis will calculate Nebraska’s Tax Burden relative to the private sector. Ultimately, it is the private sector that creates new wealth and income. A high tax burden means a state is hobbling its private sector relative to other states and reducing their long-run economic growth potential.

Click here to view tax burden data by state, type of tax, and for years 1950 to 2016

As shown in Chart 1, Nebraska’s state and local tax burden (tax collections divided by private sector personal income) was the twenty-fourth highest in the nation for FY 2016 at 14.1 percent—or -1 percent below the national average of 14.3 percent.

#Nebraska state and local #taxburden in FY 2016 was the 24th highest in the nation at 14.1%— -1% below US average of 14.3% http://bit.ly/2FX9C8F @keypolicydata #NEpol #NEleg #NEsen #NEgov #PolicyData (click to tweet)

As shown in Chart 2, Nebraska’s tax burden has increased over time by 91 percent to 14.1 percent in FY 2016 from 7.4 percent in FY 1950.

#Nebraska state and local #taxburden has increased 91% between FY 1950 (7.4%) to 2016 (14.1%) http://bit.ly/2FX9C8F @keypolicydata #NEpol #NEleg #NEsen #NEgov #PolicyData (click to tweet)

Click here to view tax burden data by state, type of tax, and for years 1950 to 2016

To put Nebraska’s tax burden into perspective, let’s compare it to size of major industries in the state (as a percent of private sector income). As shown in Chart 3, Nebraska’s 14.1 percent tax burden is greater than these combined industries: manufacturing (9.5 percent), utilities (2.8 percent), and educational services (1.1 percent).

#Nebraska state and local #taxburden > manufacturing, utilities, and educational services http://bit.ly/2FX9C8F @keypolicydata #NEpol #NEleg #NEsen #NEgov #PolicyData (click to tweet)

Nebraska’s lower than average tax burden is driven a low all other taxes burden (1.5 percent, 8th lowest) and sales tax burden (3.2 percent, 19th lowest), but they are partially offset by a high property tax burden (5.4 percent, 11th highest).

Of course, the tax burdens for local government can vary just as much as they do among the 50 states. As such, we have also calculated the local government tax burden for every County in Nebraska—this includes every taxing jurisdiction within the geographic county borders whether it is a city, a special district, or county government itself.

The 20 Nebraska counties with the highest local government tax burden include:

• Arthur County, NE (37.2 percent)
• Hooker County, NE (16.3 percent)
• Grant County, NE (16.2 percent)
• Deuel County, NE (16.0 percent)
• Valley County, NE (15.9 percent)
• Clay County, NE (15.6 percent)
• Nemaha County, NE (15.3 percent)
• Garden County, NE (14.4 percent)
• Frontier County, NE (13.9 percent)
• Blaine County, NE (13.8 percent)
• Logan County, NE (13.7 percent)
• Nance County, NE (13.7 percent)
• Polk County, NE (13.5 percent)
• Johnson County, NE (13.0 percent)
• Perkins County, NE (12.6 percent)
• Gosper County, NE (12.4 percent)
• Chase County, NE (12.0 percent)
• McPherson County, NE (12.0 percent)
• Greeley County, NE (11.5 percent)
• Hitchcock County, NE (11.5 percent)

The 20 Nebraska counties with the lowest local government tax burden include:

• Phelps County, NE (7.2 percent)
• Morrill County, NE (7.0 percent)
• Platte County, NE (7.0 percent)
• Dodge County, NE (6.9 percent)
• Harlan County, NE (6.5 percent)
• Pierce County, NE (6.2 percent)
• Lancaster County, NE (6.2 percent)
• Saunders County, NE (6.1 percent)
• Buffalo County, NE (6.0 percent)
• Cass County, NE (6.0 percent)
• Kearney County, NE (5.9 percent)
• Dakota County, NE (5.9 percent)
• Douglas County, NE (5.7 percent)
• Sioux County, NE (5.6 percent)
• Thurston County, NE (5.5 percent)
• Merrick County, NE (5.4 percent)
• Sarpy County, NE (5.4 percent)
• Cuming County, NE (5.2 percent)
• Wheeler County, NE (4.6 percent)
• Stanton County, NE (3.7 percent)

Click here to view tax burden data by state, type of tax, and for years 1950 to 2016

Finally, don’t forget to watch our exclusive time-lapse video of state and local tax burdens over the last 66 years! See if your state has been above or below the national average?