Tax Fairness and Budget Adequacy
The institution of government is the means by which we do things collectively that we could not do as individuals. One of the main functions of government—written into the Constitution—is to promote the general welfare by collecting revenue that is spent on public structures like schools, roads and bridges, and services like public safety, public health, and much more. How we collect and spend public money says a great deal about our moral objectives. Our tax and budget policies should be fair, responsible, and transparent, address income inequality, and generate sufficient revenues to support programs and services that improve our quality of life. Children and families should be a high priority in federal, state, and local budgets.
Featured Content
Tax Policy: A Powerful Tool to Advance Racial Equity in New Mexico
While we all contribute to the revenue the state uses to provide education, health care, public safety, and more, some pay a higher price than do others. Sadly, this inequity tends to fall on racial lines. Our state and national tax systems benefit those at the top (who are mostly white) while disadvantaging people of color. This report looks at concrete ways New Mexico can make our tax system more equitable.
Your Go-To Guides on How the State Collects and Spends Money
Our state’s tax system and budget are a reflection of what we value most and an illustration of the kind of communities we wish to create. Who pays taxes and how much, and how we spend and allocate that funding – basically, how we make our values a reality – are decided by the lawmakers we elect to represent us in Santa Fe. They create the annual budget that the state uses to provide services that benefit us collectively, like education and health care.
The Working Families Tax Credit Will Help New Mexico Bounce Back
Tax credits for low- and moderate-income working families are a common-sense way to spur economic activity by putting money into the hands of consumers who will spend it. But New Mexico needs to do more than increase its Working Families Tax Credit – it needs to end exclusions that keep too many families from receiving it.
Recent Publications
Exempting Social Security Income from Taxation: Not Targeted, Not Cheap, Not Necessary
Fact Sheet Several proposals to exempt Social Security income from the state income tax are being considered, but none of them would be beneficial to New Mexico. This fact sheet explains why these bills: would not benefit those New Mexicans who need relief the most; are extremely costly; and are solutions in search of a problem. (State-level data on income tax payments on Social Security benefits)
Orphaned Wells and Inadequate Bonds: How the Oil and Gas Industry Could Soon Become a Financial Burden
Policy Brief Overproduction, a global price war, and the COVID-19 pandemic have led many oil and gas companies in New Mexico and across the West to file for bankruptcy. This means orphaned wells – inactive wells that bankrupt companies have failed to plug – are left behind to pollute the state, which also has to pay the clean-up costs due to inadequate bonding requirements. At the same time, the pandemic has resulted in revenue shortfalls for our state budget. (State-level data on orphaned wells, estimated clean-up costs)
Recent Blog Posts
Your Social Security benefits are mostly un-taxed income
While we think of Social Security as “our” money, the fact is, most seniors receive much more in Social Security benefits than they actually paid in while working. The majority of the money in your Social Security check comes from other sources.
How combining a just economic transition and strong climate action equals a safer, healthier and more equitable New Mexico
New Mexicans are already experiencing severe impacts of climate change – harming our health, air, land, water, and economy. The Climate Solutions Act (HB 9) would establish nation-leading carbon pollution reduction targets to benefit current and future generations while ensuring that all New Mexicans will benefit from the jobs and economic growth provided in a clean energy future.
Recent News Coverage
Your Social Security benefits are mostly un-taxed income
While we think of Social Security as “our” money, the fact is, most seniors receive much more in Social Security benefits than they actually paid in while working. The majority of the money in your Social Security check comes from other sources.
Halfway home: Lawmakers hit crucial stretch
But James Jimenez, the executive director of New Mexico Voices for Children, a nonprofit group that advocates for health care access and economic security, said he’s optimistic about the session’s final outcome. He also said changes to New Mexico’s tax code could bolster the state’s economic diversification efforts, adding that concerns raised by business groups are not new.
Current Initiatives
Fiscal Policy Project provides timely and credible analysis of budget, tax and related issues in New Mexico so we may educate lawmakers and advocate for an equitable tax system and responsible spending.
New Mexico Fairness Project is an alliance of nearly 40 small businesses and faith-based, advocacy and labor organizations calling for a balanced approach to the state’s taxation and budget policies.
State Priorities Partnership (SPP) & Economic Analysis and Research Network (EARN) are two national initiatives in which we take part. SPP is a program of the Center on Budget & Policy Priorities (CBPP) and includes 31 state-level groups nationwide. EARN is a program of the Economic Policy Institute (EPI) and includes 55 groups from across the nation.
Resources
A Basic Family Budget Calculator is an important tool in determining if a family lives in poverty, because the system currently in place to do that is completely outdated.
Federal poverty guidelines, which dictate whether a family is eligible to receive assistance such as Medicaid and Food Stamps, are tied to a formula that was created in the 1960s. It was based on what the typical family spent on groceries because that was a family’s biggest expense at the time. Today, necessities like housing, childcare and health care take up a far greater share of most family incomes than groceries. Not only do the guidelines not take these changes into account, they do not take into account regional differences in the cost of living.
Because the federal guidelines are so inaccurate, families are generally considered low-income when they earn up to twice (or 200 percent) the poverty level. This makes up for some shortfalls in the guidelines, but they are still nowhere near as accurate as a Basic Family Budget.
Click here to find out the minimum amount families need to earn in order to live at a basic, no-frills level in New Mexico’s cities and counties.