There has been a fair amount of media coverage on the sweeping tax reform package introduced by Rep. Jason Harper and two Democrat co-sponsors (Sens. John Arthur Smith and Carlos Cisneros). The bill (HB 412) was introduced last week (but it is As with any ambitious plan, there are lots of questions and concerns.
Rep. Harper (who calls his studies of New Mexico’s tax code his “second PhD”) has provided a short, but informational white paper on the plan which we have posted here. It beats reading all 347 pages of the bill.
Simply put, we at the Rio Grande Foundation believe that tax reform is a critical step for reforming New Mexico’s economy. It is widely-recognized that New Mexico’s tax code is broken and it is holding us back (something we wrote a decade ago).
And, before anyone gets up in arms about re-instating the grocery tax as a means of broadening the base and lowering rates, Rio Grande Foundation opposed the reforms that eliminated the tax on groceries more than a decade ago…and so did NM Voices for Children (which now is leading the charge AGAINST re-instating the grocery tax).
Paul,
NM Voices was not against eliminating the GRT on food. We were against the specific WAY it was being done–that is, by raising the overall GRT rate in order to make up for the lost revenue. So poor families ended up paying a higher GRT rate on everything else (diapers, toiletries, over-the-counter meds, etc) but got little to no relief from the food deduction because they were already exempt from paying the GRT when they purchased food with their SNAP benefits. The move, as you may recall, was Gov. Richardson’s attempt to give tax “relief” to low-income families, much as he had to high-income families with his personal income tax cuts. This was, however, a much less targeted way to do so. We argued that this bill would actually hurt the families he was trying to help–which it undoubtedly did. That was the context then. The context now has changed.
Fair enough. The grocery tax was lowered within the context of raising other taxes and we agreed then. If the grocery tax were to be eliminated by itself, we’d have supported that as well. I see the distinction, but there’s no functional difference in the real world.
Fair enough. The grocery tax was lowered within the context of raising other taxes and we agreed then. If the grocery tax were to be eliminated by itself, we’d have supported that as well. I see the distinction, but there’s no functional difference in the real world.
Jason Harper’s plan would remove the tax exemption from New Mexico not for profit organizations like Presbyterian Health and many more. He is increasing the numbers of those paying the tax and also admitted that tax revenue would increase. This is a shell game where we, the tax payers, lose big time.
Perhaps the bigest question is Why do we still have a Gross Receipts Tax? Only New Mexico and Hawaii have such a tax, and it’s not a business friendly thing to have! The “anti business” legislators in Santa Fe are not helping our State!