From 2003 to 2008, New Mexico lowered its state personal income taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. in steps from 8.2% (2002) to 4.9% (2008). Over the same period, revenue from personal income tax collections did not decline but in fact grew from $923 million in 2003 to $1.186 billion this year. A new report from the Rio Grande Foundation urges the state to continue on this path, and consider eliminating the personal income tax like nearby states Nevada and Texas:
As this study will show, eliminating New Mexico’s income tax is possible within just four years. Spending restraint is a necessity, but modest, not radical measures can do the job. In fact, based on Rio Grande Foundation analysis of recent revenue growth and personal income tax revenue numbers, New Mexico’s personal income tax could be eliminated simply by restraining annual General fund increases to just 4.5 percent.
Read the full study here.
Previous Tax Foundation pieces on New Mexico:
- New Mexico Fact Sheet
- New Mexico Proposes Video Game Tax to Punish Staying Indoors, February 1, 2008
- What is a Cigarette? (Or, Why Is The Tax Code So Complex?), December 7, 2007
- Santa Fe Should Not Fatten Budget with Soda Taxes, August 23, 2007
- New Mexico Spaceport Tax Faces Delay, November 26, 2007