As mentioned in yesterday’s post on a recent policy proposal from Voices for Children, today’s blog focuses on a proposal from Think New Mexico. As mentioned, they would qualify as “centrist” and we’ve agreed and disagreed with them over the years. Most recently, we worked closely with them (successfully) on legislation reforming motor carrier laws.
Their latest proposal is really four separate proposals that they are calling their “Job Creation Initiative.” One of their proposal is a “no-brainer,” something that we should already be doing. That is a one-stop business portal for all fees and filings. This is a nice start. Of course, RGF has already outlined some of the dozens of regulations that need to be eliminated or changed. Simplifying the attainment of those often wasteful and unnecessary government permission slips for work would be a start.
A second proposal would establish a post-performance incentive that offers businesses a rebate of up to 30% of the new tax revenue they produce when they relocate to or expand operations in New Mexico—but only after new jobs and new state revenues have been created. This one sounds great in principle and performance measures have been discussed before. The devil is certainly in the details and we wonder if the 30% rebate would last for one year or be permanent and how that would work, but it is a proposal worth discussing.
A third proposal involves seven special interest tax loopholes that the organization would like to close. The problem here is that one man’s “loophole” is another man’s tax increase. We believe that tax reform should be comprehensive and that this makes both the politics and the policy better. While closing “tax loopholes” always sounds nice, those industries got those loopholes through concentrated lobbying efforts. It would seem likely that more often than not, they will be effective in retaining those incentives unless they are part of a broad-based reform effort…think Reagan’s 1986 reforms which have been completely gutted by subsequent lobbyists and subsequent congresses.
The fourth and most interesting proposal involves incentivizing educated immigrants to come to the US through tuition scholarships. This one may be worth it’s own separate future blog posting, but there are a lot of moving parts. It is important to recognize that this idea represents an “end run” around New Mexico’s poor K-12 education system and business-unfriendly policies. By bringing educated, ambitious people here, the hope is that some fraction of them will stay put and build businesses in our state. One can hope.
There are two major problems:
2) Once these people get here and they have their educations, what is to stop them from starting their businesses in other states? After all, they can move across state lines just like any other American and there are plenty of more attractive places to start a business these days than New Mexico;
Is the immigration idea worth a shot? Perhaps. I think you’ll find a lot of people angry that someone who doesn’t pay and never has paid taxes to New Mexico is getting the benefits of a lower-cost education, but these ideas are all worthy of discussing even if I don’t think any or all of them will dramatically change our economy for the better. We need to make the tough free-market reforms like adopting Right to Work and reforming our tax code to emphasize growth.