Wednesday, March 08, 2023It's A Taxing Matter; Behemoth Tax Bill Lumbers To The Roundhouse Runway; 70 Pages Of High Impact Proposals Presented And Analyzed Right Here Committee take: First up are those $750 rebate checks New Mexicans have been daydreaming about and that MLG indicated were coming their way. It appears they will have to lower their expectations because the tax bill recommends only $300 rebates to taxpayers from the oil and gas generated surplus. MLG is now countering the House offer with a $500 rebate. Our take: Given the immense $3.6 billion surplus projected for this fiscal year (and we'd bet a bowl of Barelas Green that it will be more) plus the billions accumulating in the revenue stabilization and early childhood funds, 300 bucks is a lowball rebate. If they can't do MLG's reasonable $750 for everyone, then they should do it for lower income taxpayers--those making less than $50,000 a year, and reduce the rebates higher up the income ladder. Inflation is not a mirage and neither is our status as a very poor state. The money is needed. And with outsized surpluses expected to continue in the fiscal years ahead, legislators owe it to the people to return a fair-sized sum. CHILD TAX CREDIT Scranton Joe gave the nation a big boost by increasing the federal child tax credit during the pandemic. It put a dent in childhood poverty, showing the credit works. The House tax bill's NM Child Income Tax Credit of up to $600 for low income families (increased from $175) and $400 to $200 for higher earners is right on target since the increased federal credit has disappeared with the pandemic. GROSS RECEIPTS TAX
PERSONAL INCOME TAX Committee take: The bill would overhaul income tax brackets with lower rates for some demographics and higher rates for top earners — as high as 6.9% for individuals making more than $250,000 annually. Our take: Yes and no. Yes for the cut in the lower brackets and no to the tax increase for the high earners. This is not the time to raise income taxes. We have enough money stashed in the mattress to last several budget years even in the event of a major oil crash and the 5.9 percent tax rate is plenty. The economy here needs constant stimulation. Higher income taxes don't help. There may come a time when such an increase is needed but clearly now is not that time. CAPITAL GAINS TAX On the other hand this is time for the committee's plan to reduce the Capital Gains Tax from the sale of stocks and businesses etc. The rate has been too low for years, as the bull market raged on Wall Street with high returning stocks and bonds. The committee proposes that this 40% deduction on unearned income be capped at $2500, bringing NM in-line with 41 other states. The full House and Senate should concur to collect a fair share and gain future tax revenue. BOOZE TAX We just got done saying this is not a time to increase taxes, but we don't consider a tax on booze in the state that suffers from the worst death rate an alcohol tax. We consider it a behavioral health fee. It needs to go up to cut consumption to save lives and improve the quality of life here. Gone is that solid proposal to increase the tax by a quarter a drink. In its place is a one or two cent a drink increase. That sounds woeful and it is, but it is something and the tax has not been raised for decades. We say pass this itty bitty increase and then get more aggressive in the years ahead. (Tax supporters are still trying to get this to 15 cents a drink as the bill winds its way thru the process.) CORPORATE TAX The Committee proposes a "flattening" of this tax that would make it 5.9 percent. Currently there are two rates--4.8% and the 5.9%. Gov. Martinez led the charge to cut this tax but it turned out to cost the state treasury millions and failed to deliver the corporate jobs supporters said it would. This adjustment (okay, call it a hike) is long overdue. ELECTRIC CARS  Our take: We have our doubts on this as we read regularly of Tesla cutting prices to attract more buyers and other major auto companies also coming with lower priced electric vehicles. We get the clean energy angle, but are not sold on the size of these credits as the free market already is adjusting the pricing and thus the demand. We'll count ourselves neutral and listen to the floor debate for guidance. And there you have the 2023 tax package (or some of it) presented and analyzed here with the goal of preventing your eyes from glazing over. This is the home of New Mexico politics. E-mail your news and comments. (newsguy@yahoo.com) Interested in reaching New Mexico's most informed audience? Advertise here.   (c)NM POLITICS WITH JOE MONAHAN 2023 |
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