A large share of New Mexico’s wealth is concentrated in the hands of a few – thanks in part to our backward tax system.
We can create a more equitable tax system while raising needed revenue for our state.
One of the most common-sense measures the Legislature can take this year is to repeal the capital gains deduction.
Capital gains is the income you get when you sell an asset – such as shares of stock, mutual funds or real estate – at a profit.
Right now, individuals are allowed to deduct half of their capital gains income from their state taxes. Meaning this unearned income is taxed at a lower rate than wages earned by hard-working New Mexicans.
This deduction overwhelmingly goes to the highest-income earners – the people who are already paying the smallest share of their incomes in state and local taxes.
There is also no evidence that the capital gains deduction promotes economic growth or fosters investment. It is an ineffective tax give-away, and should be repealed – now.
Repealing the capital gains deduction will make our tax system more fair and raise sustainable revenue that can be invested in the things that help build thriving communities – things like libraries, parks, infrastructure, and public safety.
It will also help us achieve that education moonshot everyone keeps talking about!
Our legislators need to act. Not only to raise needed revenue, but to ensure a brighter future for all New Mexicans.