Republican Leaders Outline Plans for Legislative Session

Rep. Tom Taylor of Farmington (the House Republicans’ floor leader) and Rep. Dan Foley of Farmington (the House minority whip) outlined their plans for the upcoming legislative session in today’s Albuquerque Journal. Specifically they explained what they plan to do with all the excess revenue flowing into the state’s coffers. The Rio Grande Foundation also outlined its hopes for the legislative session recently and there is a great deal of overlap when it comes to cutting taxes. We especially applaud the legislators for stating, “No one can say New Mexicans don’t already pay their share of taxes. New Mexico is one of the most heavily-taxed states in the nation.”
That said, there were a few concerns: First and foremost, the legislators state that New Mexico should “cut its sales tax.” While we encourage almost any tax cut, it is important to be accurate in our descriptions and New Mexico does not have a sales tax. In fact, as the Department of Revenue points out, we have a gross receipts tax which is far more encompassing and economically-harmful than a sales tax.
The legislatators also talk favorably of eliminating the state’s gas tax. While I suppose there would be no specific harm if this unlikely scenario were to occur, there are dozens of more economically-harmful taxes than the gas tax. More importantly, the gas tax is one of the few taxes that actually benefits those who actually pay it (through the construction of roads). Thus, we’d encourage Taylor and Foley — and the rest of the Legislature — to focus their efforts on reducing the gross receipts and income tax rates with some of this excess revenue. Done properly, tax cuts will spur New Mexico’s economy to the point that entreprenuers will no longer need special favors from the State to relocate here.