The first installment in our series on policies passed during the 2019 legislative session that will improve equity in New Mexico, this blog looks at how tax policies can help close income and wealth disparities that fall along racial lines. Makes sense -- since tax policies helped create those disparities in the first place.
When you filed your tax return this year, you may have noticed some changes. Maybe you got a smaller refund than usual or you owed more in state taxes. So what happened to the big fairness measures that the state Legislature just passed?
How much income a family earns determines where they live, what access they have to schools, food, and health care, as well as the amount of stress they experience in making ends meet. Evidence shows that tax credits for working families are critical for not only putting money back into the hands of these consumers, but also for improving their health and well-being. New Mexico's Working Families Tax Credit brings these benefits to families and could do more if it were increased.
Now is the time to enact bold tax reform and improve our tax system so we can begin to generate key, sustainable resources that are not ruled by the boom-or-bust cycle of the oil and gas industries. This reform should begin by restoring fairness to the personal income tax, a stable source of revenue that is underutilized in New Mexico due to tax cuts enacted in 2003.
The past decade of austerity has been hard on New Mexico’s children. Still, we are optimistic about the future because we believe in the strength and resiliency of New Mexico’s families. We know we can build stronger communities and support more resilient families and children so that they can thrive. But we can only build a stronger New Mexico if our policymakers are willing to provide the revenue we need to make these investments.
Here in New Mexico, we’ve given away more and more of our tax revenue over time in the form of corporate handouts and allowed multi-state corporations to play shell games with the profits they earn here. The result? Our state has less money to invest in the things that corporations really care about – modern and robust infrastructure, a well-trained workforce, and a market for their goods.
First, we recommend that the new governor work to make our tax system fairer and more stable. Thanks to 15 years of failed trickle-down tax cuts, New Mexico is now much too dependent on revenue from oil and natural gas extraction to fund our state services like education and public safety. But the amount of revenue we collect from oil production is based on prices that are set at the global level, so we’re stuck in a boom-or-bust cycle.
This is a perilous moment for New Mexico’s children. There’s no getting around it. Yet the future is not predetermined for kids in New Mexico. This state’s leaders can be inspired by this moment to do better by its children. They can choose to collaborate inclusively and act boldly and swiftly. That’s what it will take — both to position the state well for the 2020 census and to give children a better chance to thrive.
A minimum wage increase is long overdue – it hasn’t been raised in almost a decade. As prices increase, purchasing power erodes, and families find themselves sinking deeper into dire straits. Our $7.50 minimum wage is now worth just $6.30.
Imagine having to turn down a raise in pay because it will actually make you less financially secure. Sounds crazy, but that's what many working parents have to do--and just when they're making headway in the quest to provide their family with economic stability. It's all due to the "cliff effect" and, in New Mexico, the cliff effect for child care assistance can throw families who get even a small raise right back into poverty.