Deep tax cuts of 2003 did not bring promised jobs
March 21, 2013
FOR IMMEDIATE RELEASE
CONTACT: Sharon Kayne, Communications Director, NM Voices for Children, 505-244-9505
ALBUQUERQUE—Lawmakers cut the state’s top personal income tax rate in half in 2003 with the expectation that the big tax cut would draw companies to relocate their corporate headquarters here. That didn’t happen. Nor did the other five states that cut their personal income taxes in the last decade see any job growth as a result.
That’s the conclusion of a report released today by the Center on Budget and Policy Priorities. Of the six states that enacted tax cuts in the 2000s, three experienced slower-than-average economic growth and three experienced faster-than-average growth. The three states with faster growth—New Mexico included—are oil and gas producers and their economic growth can be traced to a rapid rise in oil and gas prices in the mid-2000s.
The report also looks at states that cut personal income taxes in the 1990s. Those states experienced slower economic growth and fewer jobs created than states that did not cut taxes. The report cautions against embracing income tax cuts as a panacea for economic ills.
“This report further confirms what we’ve been seeing for the past 40 years—that trickle-down economics is a complete and utter failure,” said Bill Jordan, Senior Policy Advisor for New Mexico Voices for Children. “And yet, some lawmakers are still trying to push more tax breaks as a magical solution to our every problem.”
Jordan points out that the recently passed omnibus tax bill is another example of wishful thinking about tax cuts and job growth. “We have no guarantee that cutting corporate taxes will bring jobs, but we do know that these tax cuts will lead to underfunding our public services like education, a tax hike for working New Mexicans, or both,” he added.
The CBPP report is available at: http://www.cbpp.org/cms/index.cfm?fa=view&id=3936
New Mexico Voices for Children is a nonpartisan, nonprofit organization advocating for policies to improve the health and well-being of New Mexico’s children, families and communities. Our fiscal policy work is funded by grants from the Annie E. Casey Foundation, the McCune Charitable Foundation, the WK Kellogg Foundation, and the Working Poor Families Project.
625 Sliver Ave. SW, Suite 195, Albuquerque, NM 87102; 505-244-9505 (p); www.nmvoices.org