Bernalillo County Commissioner Wayne Johnson had an excellent opinion piece in the Albuquerque Journal today detailing the misadventures and bad information the Democratic majority is using to push for higher taxes.
Of course, we are also in the middle of an increasingly-dramatic standoff over tax hikes passed in the Legislature that are forcing further adjustments in State government.
All of this comes at a time when New Mexico’s economy is in bad shape with highest-in-the-nation unemployment. But many seem to believe that higher taxes simply won’t impact the economy in any negative way.
Economists, even liberal ones, tend to agree that tax hikes indeed stifle economic activity. In fact, Christina Romer, formerly head of President Obama’s Council of Economic Advisors, has written in some detail on the issue of tax hikes and economic growth. Her conclusion from a 2010 study, “Our estimates suggest that a tax increase of 1 percent of GDP reduces output over the next three years by nearly three percent. The effect is highly statistically significant.”