Massachusetts developed a bad reputation as “Taxachusetts” back in the 1980s. This November, voters in that state will have be voting to completely eliminate that state’s 5.3% income and wage tax, as well as the state capital gains tax, which reaches as high as 12%. The ballot initiative would replace the $12.5 billion in taxes with . . . nothing.
As the Wall Street Journal points out:
The referendum may seem the longest of long shots in a state represented by some of Congress’s biggest spenders. But the same initiative was on the ballot in 2002, and though the political establishment roared with laughter through Election Day, the measure got 45% of the vote. This time pro-tax forces such as the Massachusetts Teachers Association are planning to spend millions of dollars warning of Armageddon.
As I discussed in our recent policy paper, New Mexicans would be wise to consider following Massachusetts by seriously considering elimination of the personal income tax. It would be great if New Mexico had the initiative process which has allowed citizens of Massachusetts to put this issue on the ballot, but we don’t. That said, it is my understanding that legislation will be introduced in the Special Session (which begins next week) to phase New Mexico’s personal income tax out.