Talking tax cuts

Gov. Martinez has discussed ways in which she’d like to reduce New Mexicans’ tax burdens by tackling aspects of the gross receipts tax. This is a good thing.

I discussed some of the preliminary reform ideas with the Santa Fe Reporter which portrayed my views towards the reform in a largely negative light. However, that is not the case. We at the RGF are very enthusiastic about the Governor’s proposal to eliminate the GRT on small businesses. Taxing these tiny, single-person, and often part-time businesses creates more hassle than it is worth in terms of revenue.

However, there is a legitimate discussion to be had over whether the GRT is worth saving or whether the best way to eliminate its worst aspects is to create carve-outs that attempt to eliminate “pyramiding.” This is where the negative nature of my comments comes through in the article. The GRT is meant to be low and broad. It has become a tax that is charged at a high rate with many carve-outs included. Martinez’s well-intended effort to eliminate pyramiding COULD result in higher rates down the line, especially if spending rises.

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One Reply to “Talking tax cuts”

  1. This just points out that even a well-intentioned Republican office-holder can inadvertently make a faulty system worse. Eliminate the carve-outs and LOWER THE RATE! This business of exempting food, etc. is only a big-government trick to hide the real impact of a high GRT rate on citizens of whatever prosperity level. BUT, the biggest thing is: CONTROL THE SPENDING!

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