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Meet the Nebraska Lawmaker Gunning To Make His State Income Tax One of the Most Punishing

Tony Vargas supports tax hikes on individuals making $100K per year

Tony Vargas (Twitter Screenshot)
• August 22, 2022 4:59 am

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A Nebraska Democrat running to unseat a Republican in a purple district is gunning to raise income taxes on anybody making more than $100,000, backing a plan that would make Nebraska's income tax rate one of the highest in the country.

Tony Vargas, who is running against incumbent Rep. Don Bacon (R.) for Nebraska’s Second Congressional District, introduced a bill in 2019 that would give Nebraska the fifth-highest state income tax rate in the country, vaulting it ahead of blue states like Vermont.

The plan proved unpopular in Nebraska, where the state legislator never put it up for a vote after it faced steep opposition and where it remains "indefinitely postponed," according to the Nebraska State Legislature’s office.

That bill also puts Vargas at odds with President Joe Biden, who has pledged never to support legislation that increases taxes on the middle class. Biden has defined the middle class as individuals making less than $400,000 a year. Few, if any, Democrats have called for targeting individuals with low-six-figure incomes to fund government programs. Even the party's most radical lawmakers, such as Rep. Alexandria Ocasio-Cortez (D., N.Y.), direct their ire at millionaires or billionaires.

Vargas did not respond to a request for comment.

Vargas faces an uphill battle against Bacon in November. Although Biden won the district in 2020, Bacon beat his challenger by nearly 5 points. Despite Vargas’s low odds, the Democratic Congressional Campaign Committee has included the race in its "Red to Blue" initiative.

Although Vargas framed his legislation as a tax hike on the wealthy, the first rate increase would hit individuals earning more than $100,000 a year or married couples earning more than $200,000 a year. An additional tax would be placed on incomes of more than $1 million a year.

Vargas said his plan would generate $478 million in new revenue over five years. Critics of his bill said revenue projections for tax hikes rarely come true and that many small businesses file as individuals. Those businesses, groups such as the Nebraska Chamber of Commerce said, would leave the state. Nebraska currently has the 16th-highest income tax rate in the country.

Both Biden and Vice President Kamala Harris endorsed Vargas in 2020 during his run for the Nebraska state senate, and the candidate called their support "an honor." Their endorsement came just days before Vargas donated $250 to Biden’s presidential campaign.

But Vargas now is mum on Biden, who has seen his approval rating plummet. Biden won the Nebraska second district by 7 points in 2020, although a recent poll found Bacon narrowly beating Vargas among likely voters there.

Vargas has also not taken any positions on Biden’s legislative agenda. His campaign website calls for tax cuts and mostly focuses on social issues such as abortion. Neither Biden nor the Democratic Party are mentioned.

Published under: Nebraska, Taxes, Tony Vargas