Dear Legislator,
On behalf of National Taxpayers Union (NTU), the nation’s oldest taxpayer advocacy organization, I write in firm opposition to House Bill 6. This act features a package of misguided tax increases that will further burden taxpayers, businesses, and consumers across the state. NTU has long advocated for policies that will generate economic growth, and supported reforms to state tax systems that enable individuals and businesses to thrive. Unfortunately, this legislation would fail to bring prosperity to New Mexico and I urge you to stand with taxpayers against these proposed tax increases.
NTU is particularly concerned that this legislation is a direct tax increase on middle class taxpayers. First and foremost, House Bill 6 would add another three tax brackets to the tax code and increase the top marginal rate from 4.7 percent to 6.5 percent. A 6.5 percent top tax rate is extremely uncompetitive and would be significantly higher than each of the states bordering New Mexico. In addition to greatly increasing the top rate, House Bill 6 raises rates on middle class filers. According to the Fiscal Impact Notice from the independent Legislative Finance Committee, single filers earning just $45,000 annually and joint filers earning $90,000 will be hit with a higher state tax burden. The Committee also estimates these higher rates will generate an additional $120 million annually in new tax revenue.
Oftentimes lawmakers will attempt to raise taxes to offset budget deficits, but as you are aware, New Mexico actually has an estimated $1 billion budget surplus. Instead of needlessly raising taxes, lawmakers should instead embark on comprehensive tax reform legislation to return money back into the pockets of hardworking taxpayers.
A 10 cent-per-gallon gas tax hike and vehicle excise tax increase are also tucked into House Bill 6. Such increases would hit low-income New Mexicans the hardest and have a potentially adverse effect on commerce. A new tax rate of 27 cents-per-gallon would be higher than that of any neighboring state and sacrifice New Mexico’s competitive edge. Together, these taxes would drain $124 million from the pockets of consumers annually. If lawmakers want to make infrastructure funding a priority for the 2019 legislative session, they should use their large budget surplus instead of putting greater burdens on taxpayers and consumers.
Due to the many problems with House Bill 6, NTU strongly opposes this legislation. Adding to the tax burden would only exacerbate some of the structural economic woes by further straining family budgets, thus inhibiting growth. State residents are hungry for comprehensive tax reform, and this legislation is the last thing your constituents need. Accordingly, we encourage you to keep these concerns in mind as you hopefully work toward a more fiscally responsible future for New Mexico taxpayers and consumers.
Sincerely,
Thomas Aiello
Policy and Government Affairs Associate