COMMENTARY: As a citizen of New Mexico I want to suggest some fixes for New Mexico’s economy.
Fix number one: To compete with surrounding states, let us jettison the personal income tax. New Mexico is a poor state and really has no business taxing the income of its poor residents.
Fix two: Eliminate the compensating tax, which punishes out-of-state businesses for locating here when they buy equipment from out of state to run a business here. No wonder we can’t attract business to New Mexico.
Three: Convert the gross receipts tax into a state sales tax, which most of the residents of New Mexico want anyway. Right now the gross receipts tax is a convoluted mess of exemptions that continually confuses business owners, especially those who conduct business in more than one location in New Mexico. A sales tax would simplify what is owed and free up businesses to focus on business rather than what they owe in taxes. Municipalities and counties would have more freedom to use sales taxes as they see the need without having to direct them to specified areas, with some exceptions.
I think these moves will be painful for the government but will create a dramatic sea change in New Mexico’s economy. Why keep the status quo and continue to limp along on a false economy for years when we can fundamentally repair New Mexico? To not confront what is fundamentally wrong will doom us to years of Band Aid fixes.
I hope the current legislative session will put some of these ideas to a vote or let the people vote on them.
Tom Dixon has lived in New Mexico since 1981, working in both the private and public sectors in the personal financial planning industry as a certified financial planner and in not-for-profit budgeting.