Leadership Tax Plan Hits Poor Hardest
reportMedia outlets are reporting that leaders in the New Mexico legislature reached a tentative agreement in the days leading up to this week’s special legislative session that would impose over $220 million a year in new Gross Receipts Taxes (GRT) and cigarette taxes. Reports also indicate that the agreement does not include any provisions to increase the personal income tax, but does include a small expansion of a low-income tax credit to help offset the regressive impact of this agreement. This ITEP analysis shows that even with the proposed expansion to this credit, the agreed-upon tax changes would fall much more heavily on low- and middle-income families than on the best-off New Mexicans. The analysis also shows how substituting income tax increases for the proposed GRT changes could allow the state to raise additional revenues while reducing the tax increase on most families.