A look at New Mexico’s tax competitiveness rankings by Tax Foundation

We know that New Mexico’s overall economic competitiveness is lacking due to an overall lack of economic freedom. But, what about JUST tax policy? How does New Mexico fare when ranked against other US states?

The Tax Foundation produces an annual tax competitiveness index which can be found here. The good news is that New Mexico is ranked 28th overall which is just mediocre, not our usual dead last. The bad news is that with the state running massive budget surpluses due to the ongoing oil and gas boom New Mexico COULD be doing so much better. 

So, according to the Tax Foundation New Mexico’s tax code is less competitive than any of its neighbors besides Colorado.

Worse, as the chart below shows, New Mexico’s tax competitiveness has actually gotten worse under Gov. Lujan Grisham with the state has seen a significant decline in its ranking since 2020 dropping from 20th to 28th during that time period. It’s not the biggest drop in the report, but again, with New Mexico flush with cash why are our politicians enacting policies to make the state less competitive?

The map below is an interactive map showing how the states stack up nationwide.