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The Legislature's Revenue Committee on Monday shelved a bill to increase state income taxes on millionaires and other high-income Nebraskans.

Sen. Tony Vargas of Omaha, sponsor of the proposal (LB50), had argued the measure was needed not only to establish more tax fairness, but also to replenish a state revenue stream that is needed to adequately fund essential state programs and services.

The bill would have raised $500 million in additional revenue over the next five years, beginning with an estimated $139.9 million in fiscal 2019-20.

Committee members discussed the proposal during an executive session and agreed to just hold onto it rather than submit it to a kill motion. No one argued in support of the bill.

The proposal would create a new 7.84 percent income tax bracket for taxpayers with income of $100,000 or more. The current top rate is 6.84 percent of taxable income and it is applied to all taxpayers with an income of $30,420 or more. 

LB50 proposes that an additional 1 percent tax would be applied to income above $1 million and an additional 2 percent tax be imposed on income in excess of $2 million.

Among those lining up in opposition to the proposal at its public hearing in January were representatives of the Nebraska Chamber of Commerce, the Greater Omaha Chamber of Commerce, the Nebraska Bankers Association and the Lincoln Independent Business Association.

Ron Sedlacek, Nebraska Chamber vice president, cautioned the new tax would be imposed on "highly mobile people" who might choose to leave the state. 

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Reach the writer at 402-473-7248 or dwalton@journalstar.com.

On Twitter @LJSDon.

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