Taxes, regulation, and economic growth

Read my letter to the editor from the Business Outlook section of today’s Albuquerque Journal.

In his column on the various tax bills introduced in the 2012 legislative session Winthrop Quigley focuses on taxes, one reason that New Mexico is not economically-competitve.

However, economic policy is about more than just taxes. In terms of overall economic freedom, according to the Fraser Institute’s “Economic Freedom of North America,” New Mexico ranks 49th. Factors like work force freedom and regulations come into play in broader measures of economic freedom that are not reflected in studies of taxation. Yet their impact is very real.

Even on the issue of taxes, Bill Jordan of Voices for Children – an organization that has never met a tax hike it didn’t support – is simply wrong when he says that New Mexico usually is in the “middle of the pack.” Far more often, our tax code and tax burden places us in the bottom 10 among states.

While not a panacea, Gov. Richardson’s tax cuts did have a serious, positive, economic impact. New Mexico, a state that had been among the bottom 3-4 states in personal income saw income rise to 43rd in the nation. Yes, the broader national economy wiped out jobs everywhere, but New Mexico is better off than it was before.

Regardless who is right on the issue of whether taxes should be cut and how, passage of a “Right to Work” law as was just done in Indiana would be a no-cost way to make New Mexico more economically-competitive. I eagerly wait the day when Quigley and Voices for Children support such proven job creation measures.

Paul J. Gessing
President
Rio Grande Foundation
PO Box 40336
Albuquerque, NM 87196
505-264-6090