House Republicans are proposing to eliminate New Mexico’s personal income tax, a move they argue would put more than $2 billion a year back into taxpayers’ pockets.According to House Republicans, New Mexico has one of the highest tax burdens in the country, yet taxpayers continue to see some of the worst returns for their money.Rep. Luis Terrazas, R-District 39, expressed support for the plan. “Give it to them and let them spend it where they see fit rather than the government telling you, give me your money. We’ll spend it where we think,” Terrazas said.Eliminating the tax would return roughly $2.1 billion annually to state taxpayers. Personal income taxes are progressive, so someone earning $45,000 annually would get back roughly $1,000 in New Mexico, but someone earning $250,000 annually would get roughly $11,000.While the elimination of the tax would return revenue to taxpayers, it creates a fiscal burden with that money no longer coming into the state. When addressing what would replace the funds, Terrazas pointed to the state’s current reserves.”The state of New Mexico is sitting on about $75 billion in different funds, and since I’ve been in office, we’ve seen the state of New Mexico each year have an average of $2.5 billion to $3 billion in new money above, beyond what it takes to run our government,” Terrazas said.Terrazas stated that the extra money is a signal that the state is over-taxing, adding that the proposal is not a bait-and-switch.”We’re getting recurring funds, plenty of funds to pay our bills and to not hurt a single one of the different things that we’re covering throughout the state. None of the programs are going to be cut. This is not going to cut any programs,” Terrazas said.The Governor’s office issued a response to the proposal, stating: “Gov. Lujan Grisham appreciates that Republican leaders support her proposal to give New Mexicans a $250 rebate to help offset the cost of soaring gas prices that resulted from President Trump’s war in Iran. The governor’s proposed rebate would require a one-time expenditure. Eliminating New Mexico’s personal income tax would have recurring and significant budget implications that demand comprehensive analysis and rigorous debate better suited to a regular legislative session than a special session. If Republican leaders want to pursue this proposal, Gov. Lujan Grisham suggests they introduce legislation at the outset of the next 60-day session that begins in January.”With the issue expected to go before lawmakers during the legislative session in January, both gubernatorial campaigns shared their positions.Democratic candidate Deb Haaland released a statement saying: “My priority is driving down costs and putting more money in New Mexican’s pockets. If I’m elected, I will prioritize lowering costs by building more affordable housing and cracking down on predatory rental practices, increasing middle-class tax breaks like the working families tax credit and the child tax credit, and healthcare reform that makes it easier and cheaper to see a doctor.”Republican candidate Gregg Hull said this is an issue he has been fighting for, noting it would be his first priority in office.”I’m in support of it. It’s been something that I’ve talked about during our campaign now for months,” Hull said. “If you want to bring people relief, the best way to do that is leave money in their pockets.”Hull addressed how the state would make up that $2.1 billion lost.”If all of that (the money given back) was spent on a gross receipts taxable item, that would generate $110 million right there,” Hull said.Hull stated that he would not raise taxes anywhere else, aiming instead to “grow the economy, reduce expenses, and fill the gap.””We want to grow those industries because if we grow those industries, we’re going to be able to make up that $2.2 billion gap very rapidly, a lot quicker, I think, than what people might think,” Hull said.Daniel Garcia with the Democratic Party of New Mexico also weighed in on the matter in a statement:”At a time when Trump Republicans are driving up costs on virtually everything, the House Republicans should be ashamed of themselves for even suggesting their latest idea for a handout for the wealthy that would be a massive shift of the tax burden onto New Mexico’s working lower- and middle-class. DPNM calls on the New Mexico House GOP, the most unserious and ineffective legislative caucus in the country, to do something other than publicity stunts for once, and work alongside Democrats to help New Mexicans who have to work for a living. Simply put, the Republicans’ plans would hurt working families who have to spend more of what they earn just to get by day-to-day, exacerbating economic inequality.”
House Republicans are proposing to eliminate New Mexico’s personal income tax, a move they argue would put more than $2 billion a year back into taxpayers’ pockets.
According to House Republicans, New Mexico has one of the highest tax burdens in the country, yet taxpayers continue to see some of the worst returns for their money.
Rep. Luis Terrazas, R-District 39, expressed support for the plan. “Give it to them and let them spend it where they see fit rather than the government telling you, give me your money. We’ll spend it where we think,” Terrazas said.
Eliminating the tax would return roughly $2.1 billion annually to state taxpayers. Personal income taxes are progressive, so someone earning $45,000 annually would get back roughly $1,000 in New Mexico, but someone earning $250,000 annually would get roughly $11,000.
While the elimination of the tax would return revenue to taxpayers, it creates a fiscal burden with that money no longer coming into the state. When addressing what would replace the funds, Terrazas pointed to the state’s current reserves.
“The state of New Mexico is sitting on about $75 billion in different funds, and since I’ve been in office, we’ve seen the state of New Mexico each year have an average of $2.5 billion to $3 billion in new money above, beyond what it takes to run our government,” Terrazas said.
Terrazas stated that the extra money is a signal that the state is over-taxing, adding that the proposal is not a bait-and-switch.
“We’re getting recurring funds, plenty of funds to pay our bills and to not hurt a single one of the different things that we’re covering throughout the state. None of the programs are going to be cut. This is not going to cut any programs,” Terrazas said.
The Governor’s office issued a response to the proposal, stating:
“Gov. Lujan Grisham appreciates that Republican leaders support her proposal to give New Mexicans a $250 rebate to help offset the cost of soaring gas prices that resulted from President Trump’s war in Iran. The governor’s proposed rebate would require a one-time expenditure. Eliminating New Mexico’s personal income tax would have recurring and significant budget implications that demand comprehensive analysis and rigorous debate better suited to a regular legislative session than a special session. If Republican leaders want to pursue this proposal, Gov. Lujan Grisham suggests they introduce legislation at the outset of the next 60-day session that begins in January.”
With the issue expected to go before lawmakers during the legislative session in January, both gubernatorial campaigns shared their positions.
Democratic candidate Deb Haaland released a statement saying:
“My priority is driving down costs and putting more money in New Mexican’s pockets. If I’m elected, I will prioritize lowering costs by building more affordable housing and cracking down on predatory rental practices, increasing middle-class tax breaks like the working families tax credit and the child tax credit, and healthcare reform that makes it easier and cheaper to see a doctor.”
Republican candidate Gregg Hull said this is an issue he has been fighting for, noting it would be his first priority in office.
“I’m in support of it. It’s been something that I’ve talked about during our campaign now for months,” Hull said. “If you want to bring people relief, the best way to do that is leave money in their pockets.”
Hull addressed how the state would make up that $2.1 billion lost.
“If all of that (the money given back) was spent on a gross receipts taxable item, that would generate $110 million right there,” Hull said.
Hull stated that he would not raise taxes anywhere else, aiming instead to “grow the economy, reduce expenses, and fill the gap.”
“We want to grow those industries because if we grow those industries, we’re going to be able to make up that $2.2 billion gap very rapidly, a lot quicker, I think, than what people might think,” Hull said.
Daniel Garcia with the Democratic Party of New Mexico also weighed in on the matter in a statement:
“At a time when Trump Republicans are driving up costs on virtually everything, the House Republicans should be ashamed of themselves for even suggesting their latest idea for a handout for the wealthy that would be a massive shift of the tax burden onto New Mexico’s working lower- and middle-class. DPNM calls on the New Mexico House GOP, the most unserious and ineffective legislative caucus in the country, to do something other than publicity stunts for once, and work alongside Democrats to help New Mexicans who have to work for a living. Simply put, the Republicans’ plans would hurt working families who have to spend more of what they earn just to get by day-to-day, exacerbating economic inequality.”
