Prominent Democrat Senators hope to completely abandon Bill Richardson’s successful tax cuts

With a $3.5 billion surplus available to the Legislature one might think that the New Mexico Legislature (regardless of party) would take the opportunity to enact policies that would help “diversify” the economy and bring new businesses to the State. Despite all the rhetoric, if one takes the proposals outlined in the Albuquerque Journal by Senate Majority Leader Peter Wirth and Senate Tax Committee Chair Benny Shendo seriously,  you’d be VERY wrong.  Let’s go through the proposals one by one.

1. Ensure that big, out-of-state corporations pay the same tax rate as homegrown New Mexico small businesses. The Senators fail to explain exactly what they mean, but the only bill dealing with corporate income taxes is the regressive, tax hike HB 322 sponsored by Reps. Harper and Maestas. It does nothing to big businesses, but increases the tax rate on smaller businesses.
2. We need to make sure the wealthiest people in our state are pulling their weight in taxes. Here they seem to be referring to HB 119 which indeed raises taxes on personal income although new rates kick in at $200,000 for married couples. Raising the top rate on personal income taxes is totally unnecessary given the massive surplus and will make New Mexico even less attractive as a destination for business and thus more reliable on oil and gas.
3. We seek to limit the tax deduction for capital gains on sales of stocks and similar financial products to a maximum deduction of $2,500, so these transactions no longer receive preferential treatment. The Senators call the capital gains tax cut under then Gov. Bill Richardson a “mistake.” As the Federal Reserve Bank of St. Louis correctly notes, “Taxing capital gains effectively increases the cost of funds to firms because it reduces the after-tax return to stockholders.”
4. Extending last year’s cash rebates into this 2023 tax season and increasing the Child Tax Credit will put money back into New Mexicans’ pockets. These are fine as far as they go, but neither will do a thing to improve New Mexico’s short or long term economic prospects.

In today’s New Mexico political scene Bill Richardson would be closer to the Republicans than Democrats on economic policy. As we’ve reported time and again, Richardson’s tax cuts WERE a success.