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Economic justice means that no one who works full
time must live in poverty, that every family has the opportunity to build assets,
and that the tax system is just - meaning those who can, pay their fair share. Progressive
Tax Policy Reform New Mexico Voices for Children supports progressive
tax policies that assure adequate state revenue to fund all-important services
like health care, education and public safety, and that reduce poverty. We oppose
regressive tax policies that favor the wealthy and harm families by reducing the
amount of money available to pay for education, health care and public safety.
In the 2004 and 2003 legislative sessions New Mexico policymakers reduced the
top rate of the personal income tax from 8.2 percent to 4.9 percent. This benefits
New Mexico's wealthiest residents and means that the state's highest income residents
no longer pay a fair share of taxes. In 2007, individuals with taxable incomes
of $295,000 or more will get a tax cut of $13,227, while an individual with a
taxable income of up to $29,000 will get a tax cut of 0. Those with a taxable
income of between $29,000 and $45,000 per year will get $38 . When this tax cut
is fully phased in, in 2007, a mother of two children with a taxable of income
of just $20,000 per year will pay the same personal income tax rate (4.9 percent)
as a mother of two children with a taxable income of $90,000. The capital
gains tax cut also passed in 2003 is another windfall for wealthy people who tend
to own stock or property and therefore are most likely to gain from this tax cut. These
cuts are not only unfair, they put tremendous pressure on the state budget. Less
money in the state budget often means cuts in funding for essential services.
When the tax cuts are fully phased in, in 2007, there will be $360 million less
- every year - in tax-generated revenue for the state budget.
Please go to
the Fiscal Policy Project for more information
about New Mexico's tax policy and the coalition effort for progressive tax reform.
New Mexico Voices for Children supports these policies:
- Adopt a Working Family Tax Credit to piggy-back on the federal Earned Income
Tax Credit (EITC). The EITC has proven to be one of the best policies for assisting
working poor families. A state EITC, however, should not replace the state's Low
Income Comprehensive Tax Rebate (LICTR).
- Close the loophole in the personal
income tax for higher income people who itemize deductions. The loophole allows
mostly upper-income taxpayers who itemize to take a deduction on their federal
income tax for the state and local taxes they paid. Then, they are allowed to
report the lower taxable income amount from the federal form as the state taxable
income. In other words, New Mexico allows these taxpayers a deduction for paying
taxes to the state! New income generated: approximately $60,000,000.
- Reinstate
the estate tax on property worth more than $2 million. Family farms would be exempted.
New income generated: approximately $20,000,000.Close the loophole for corporations,
which allows those that conduct business in more than one state to avoid paying
corporate income tax to New Mexico on the profits they make here. New income generated:
$50 million.
- Greater transparency of the state's tax policy. Every year,
New Mexico grants hundreds of millions of dollars in tax cuts, credits and incentives
(called 'expenditures') to the business community with the expectation that jobs
will be created. But nobody knows exactly how much money is lost to the state
budget each year because of these policies, nor does anyone know what, if anything,
we gain economically. It's our money, we have a right to know where it's going.
New Mexico Voices for Children
opposes these policies - Making the federal income and estate taxes
permanent. The Bush administration's tax cuts have lead to unprecedented debt
and cuts to vital programs like Medicaid and food stamps.
- A tax on sodas
or sweetened foods. This is a regressive tax that does nothing to reduce consumption
of sugar-containing foods. Income generated: $25,000,000.
Reducing Poverty Through a Living Wage New Mexico Voices for Children
believes that everyone should have the opportunity to work towards economic stability
and prosperity. A living wage enables families to work their way out of poverty
and into prosperity. We support living wages. Our research determined what
wage level is required for different types of households to live at a "bare
bones" level in 52 communities across New Mexico. (For example, the bare
bones wage in Albuquerque would be approximately $12 per hour). The current federal
minimum wage is $5.15 per hour. The Federal Poverty Level (FPL) is woefully
outdated. Depending on family size and geographic area, New Mexico's working families
need to earn from 136% to 247% of the FPL just to live at a bare bones level. New
Mexico Voices for Children supports these policies:
Research shows
that having assets - such as a house or savings account - are essential to a family's
ability to move out of poverty and into economic security. New Mexico Voices for
Children supports policies that enable low-income families to develop and maintain
assets. For a Financial Security Scorecard on New Mexico published by CFED, see
2005 Assets
and Opportunity Scorecard: Financial Security Across the States. New
Mexico Voices for Children supports these policies: - Limit
the fees and interest that can be charged to consumers by payday, car title and
tax refund lenders. Under current law, New Mexico does not limit fees and interest
or regulate the length and term of consumer loans. Unscrupulous lenders often
charge interest in excess of 600%. Voices supports legislation that would end
predatory lending practices and encourage fair and honest lending. Weak legislation
that falls short of limiting interest and fees should be rejected.
- Add
additional money to the Housing Trust Fund that would allow low-income families
to obtain financial help to buy a house.
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