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Kozi Checks & Balances TaxTactics News

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January 15.2025

2 Minutes Read

Nebraska’s Property Tax Relief Under LB 34: Are We Making Progress?

Aerial view of Nebraska state capital at sunset, highlighting property tax aspects.

The Challenges of Property Taxes in Nebraska

Nebraska homeowners are grappling with escalating property tax bills, prompting a significant examination of state tax policies. Historically, property taxes represent the largest source of funding for essential local services, including schools, law enforcement, and community infrastructure. However, recent legislative attempts to mitigate the financial strain on residents have garnered both attention and criticism.

Understanding LB 34: A Legislative Response

In 2024, the Nebraska Unicameral enacted LB 34, a significant property tax measure aimed at addressing years of rising tax rates. This legislation introduced a true levy limit, a first for the state, but many argue that the implementation has flaws. Critics point out that while the bill establishes some level of constraint, these limits can be either too lenient at times or excessively tight in others, creating uncertainty for homeowners and municipalities alike.

The Bigger Picture: Trends in Property Values

A key factor in Nebraska's property tax dilemma is the rapid increase in home values. Since 2020, the average home price in Nebraska has surged by 23% in real terms, which is on par with national trends. This rise follows a historic period where property values grew at a slower pace compared to the rest of the country. Consequently, homeowners in the state are not only facing higher taxes but also finding it increasingly challenging to afford their housing, making the focus on property tax reform more critical than ever.

Future Implications for Tax Policy

As Nebraska continues to revise its framework for property taxes, the stakes are high. The recent legislative reforms must strike a balance between providing immediate relief for taxpayers and ensuring sustainable funding for crucial public services. Policymakers must consider potential unintended consequences, particularly in housing markets where strict tax caps could lead to declines in property values or hinder new developments. The ongoing dialogue surrounding these issues will shape the financial landscape for Nebraska residents in the years to come.

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11.20.2025

Why Delaware’s Decoupling from OBBBA May Harm Economic Growth

Update Delaware's Economic Direction: The Risks of DecouplingThe ongoing debate about Delaware's possible detachment from the One Big Beautiful Bill Act (OBBBA) has raised eyebrows among many, including policymakers and business leaders alike. Governor Matt Meyer's call for a special session to discuss decoupling some tax codes reflects concerns over projected revenue shortfalls. Yet, this proposed decoupling could jeopardize the state’s attractiveness as a business destination.The Importance of Full Expensing for Economic HealthThe OBBBA introduced significant provisions such as allowing businesses to take immediate deductions for research and development costs and for machinery. This approach, known as full expensing, facilitates investment by businesses and can lead to improved productivity, higher wages, and increased job creation. Economists argue that maintaining these benefits is crucial for the long-term growth of the Delaware economy.Criticism of Decoupling: Business Impact and Future ProjectionsCritics of the decoupling proposal highlight that reverting back to the amortization of R&D expenses—spread over five years—could be a setback for many startups and innovative companies in Delaware. According to experts, the move may impose a significant burden on businesses that depend on upfront deductions to ease cash flow during crucial growth stages. Representative Jeff Hilvosky emphasized the necessity of tax policies that enable investment decisions crucial for creating jobs.The Legislative Landscape: A Divided HorizonAs it stands, the Delaware House passed the decoupling bill despite widespread opposition from key business groups such as the Delaware State Chamber of Commerce. Advocates fear that aligning state tax policies against the federal landscape could further endanger Delaware's competitive edge, particularly when it comes to attracting businesses and startups. If neighboring states continue to adopt more favorable tax structures, Delaware risks losing its status as a corporate haven.Framing the Future: Evaluating Long-term ConsequencesThe debate surrounding the OBBBA concludes with broader implications not just for Delaware, but as a microcosm of national tax policy discussions. A careful consideration of the potential consequences of decoupling reveals that short-term savings could lead to long-term losses in tax revenue, innovation, and employment. It is essential for Delaware to consider how these changes impact not only the current budgets but also the future landscape for economic growth.

11.19.2025

Why Tariff Dividends Could Weaken the Economy: An In-depth Analysis

Update Why Tariff Dividends May Burden the Economy: A Critical Examination The U.S. economy is bracing for a significant policy shift as President Trump's proposal for $2,000 "tariff dividends" for low- and middle-income Americans raises questions about fiscal viability. While the intention behind these payments is to support financially strained households, a closer look reveals that the implementation of such dividends could cost considerably more than the revenue generated from new tariffs. Understanding the Financial Landscape of Tariff Dividends According to recent analyses, the cost of implementing these dividend designs could range from $279.8 billion to a staggering $606.8 billion. In stark contrast, the tariffs themselves are estimated to generate about $158.4 billion in 2025, with another $207.5 billion in 2026. Thus, even the most frugal dividend plans would quickly exhaust the incoming revenue, leaving little to offset budget deficits or fund public services. Tariff Dividends vs. Revenue Generation: The Numbers Don't Add Up The proposal models three key options for the $2,000 payments. Each option, however, reflects a systemic flaw: the total projected cost of providing dividends would outstrip revenues from tariffs almost universally. For instance, if we consider a situation where both tax filers and their dependents qualify for the payments, the costs jump even higher, indicating a financial shortfall that policymakers need to address. Judging the Real Costs: Adding Up the True Impact The term "tariff" itself denotes taxes imposed on imported goods. These additional burdens can cause price hikes for consumers and constrain businesses, leading to diminished economic activity overall. The new tariffs, while designed to generate revenue, also risk shrinking tax bases due to the indirect taxpayer burden they present—a reality often overlooked in budgetary forecasts. A Broader Economic Perspective on Tariff Revenue From another viewpoint, the intricacies of tariff revenue reveal a reality where simply pouring funds back to citizens could aggravate the federal deficit. Estimates suggest that implementing a recurring dividend could inflate the national debt significantly over the upcoming decade—potentially pushing it beyond 134% of GDP by 2035. Such outcomes could hinder overall economic resilience as the nation struggles with historical deficit levels. Moving Towards Economic Stability In light of these findings, a more rational approach may involve reallocating tariff revenues to reduce national debt rather than issuing dividends directly to taxpayers. By prioritizing debt reduction, these revenues can contribute to creating a more stable economic environment, rather than exacerbate existing fiscal concerns. In conclusion, while the notion of tariff dividends may seem initially appealing, the long-term economic implications warrant a cautious and critical assessment. With the stakes this high, steering conversations towards alternative solutions could significantly benefit the nation’s fiscal future.

11.15.2025

Is OBBBA the Largest Tax Cut in History? A Deep Dive Analysis

Update Understanding the OBBBA: A New Era in Tax Cuts In the summer of 2025, Congress passed the One Big Beautiful Bill Act (OBBBA), heralded by some as the "largest tax cut in American history." This significant legislation aims to extend the Tax Cuts and Jobs Act (TCJA) and implement various tax reductions proposed by the administration. While the OBBBA features a projected $5 trillion reduction in federal tax revenues from 2025 through 2034, it ranks as the sixth-largest tax cut in the U.S. history relative to GDP, with an average revenue reduction of 1.4% over a ten-year budget window. Comparative Analysis: How OBBBA Falls Short of the Largest Tax Cuts Historical perspective reveals that the OBBBA, despite its size, does not surpass the Economic Recovery Tax Act of 1981 or the Revenue Acts of 1945, 1948, and 1964, which collectively reduced tax revenues by over 2% of GDP. These acts were pivotal in easing the financial burdens post-World War II and stimulating economic growth in subsequent decades. In contrast, the OBBBA, above all, maintains a modest impact in proportion to the overall economic landscape, ranking lower than many expect based on its ambitious title. Tax Benefit Distribution: Who Wins and Who Loses? While the act aims to provide widespread tax relief, studies indicate that not all taxpayers will benefit equally. Recent analyses reveal that nearly half of American households may experience minimal tax cuts of less than $100 annually. The bulk of substantial tax cuts tends to flow to upper-middle-income households, emphasizing a disparity that raises questions about the OBBBA’s claim to be the "largest" tax relief legislation. Specifically, a significant portion of tax breaks is targeted at higher-income earners who can capitalize on new deductions and credits, contrasting sharply with low-income households that might see little to no effect. Future Implications for Taxpayers and Businesses One essential takeaway from the OBBBA is its dual approach of extending tax cuts while introducing significant spending reductions alongside. This complex interaction could shape future fiscal policies and taxpayer experiences as the IRS grapples with implementing these changes amidst a diminishing workforce. These adjustments might also impact how taxpayers plan for their fiscal responsibilities moving forward, especially in sectors heavily influenced by the new tax laws. Conclusion: Is the OBBBA Really a Game Changer? While its proponents argue that the OBBBA represents a significant shift in tax policy towards favorable taxation for businesses and families alike, a closer examination suggests a more measured view. As the act becomes entrenched in public finance, its effectiveness may be judged not just by its fiscal scale but by its equitable distribution of benefits. The ongoing debates surrounding its implementation will likely influence the next steps in U.S. tax reform. Stay informed on how the OBBBA might affect you or your business by reaching out to a tax advisor for personalized insights.

Nebraska’s Property Tax Relief Under LB 34: Are We Making Progress?

The Challenges of Property Taxes in Nebraska

Understanding LB 34: A Legislative Response

The Bigger Picture: Trends in Property Values

Future Implications for Tax Policy

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