During my time as governor, I could only dream of what a $3.6 billion budget surplus might look like. I want to commend Gov. Michelle Lujan Grisham, as well as legislative leaders, for the smart investments they’re making in the critical causes of our day – including the expansion of early childhood programs, access to college, cleaner energy and environmental protection. These are truly extraordinary times, and extraordinary work is being done.
However, as excited as I am about these initiatives, I am equally concerned about lawmakers’ tax plans this session. Amid the most significant revenue boom since statehood, they’re preparing to raise taxes – on investment income and savings, as well as on the income earned by countless small businesses, families and skilled professionals. Our income tax rates would rise to nearly 7%, placing New Mexico in a small group of the highest-tax states in America.
This course is a divisive one, and it’s unnecessary, unhelpful and unwise. Given the state of things, we can build an awful lot right now, but building an unwelcoming economy shouldn’t be one of them.
And to my fellow Democrats in the Legislature, let us not be known as the party of tax increases and bureaucracy. Let us be known as the party of higher wages, entrepreneurship, small businesses and innovative technology. The average New Mexico family wants economic security and more money in their pockets. Let us not spoil it all with tax increases.
We should want people to move here, visit here, and raise a family that is able to stay here. Not rich people – or poor people – or somewhere-in-the-middle people. We need them all, and our tax code should encourage them all to make New Mexico their home.
Economically, we should want people to be able to find work here, and for businesses to be able to find workers. It doesn’t benefit New Mexico for our national labs to struggle to find engineers and scientists because we’ve made it expensive for them to live here. Our taxes shouldn’t drive away any kind of worker. What does it benefit our state to raise taxes on doctors and other health care practitioners, as is being proposed? It doesn’t. You may park a little more revenue in the government savings account, meanwhile, you’ve made it even harder for New Mexicans to find a doctor. If you agree access to health care is a vital right, then raising taxes on physicians makes the problem worse.
And we should want new companies to choose our state for their plants and stores – for small companies to be comfortable here and unburdened, and for large companies to choose to place operations, headquarters and employees in New Mexico.
In the end, what does raising taxes – whether on investments or income – really get our state, especially during a multi-billion-dollar revenue boom? Some say it sends a message, and in the abstract, that may be true. But in reality, it just makes life harder for the people we care about helping – the family business that’s been through tough times, the single mother who can’t get a doctor’s appointment, and the talented college kid who has to leave town to chase her dream.
I agree that taxes speak. And when governments arbitrarily raise tax rates, they shout for certain people – and certain types of economic activity – to go away. When we lowered income taxes in 2003 and cut the tax on capital gains, we did it as a coalition of Democrats, Republicans, businesses and labor. We need that same unified front today, with the same clear message: in New Mexico, we want your jobs, investment, talent, and energy. And we’re willing to fight for it.
