Calling New Mexico’s tax system “a mess,” a state senator proposes a plan to eliminate most levies in the Land of Enchantment.
“It’s difficult, it’s confusing, and it’s certainly not fair or simple,” State Sen. William Sharer, R-Farmington, said during a news conference Wednesday.
Brandishing a copy of the state’s 1,089-page tax code, Sharer claimed New Mexico could eliminate almost every tax currently levied by reforming the way it collects the gross receipts tax.
“No personal income tax, no corporate income tax, no compensating tax, no vehicle excise tax, no insurance premium tax and about a hundred other taxes go away,” Sharer said.
The GRT would stay, but would be reduced to 2 percent. Currently the state GRT is 5.125 percent, and additional taxes in counties and cities raises the rate in some municipalities to as high as 8.6875 percent.
Sharer cited a study by Lee Reynis at the University of New Mexico Bureau of Business and Economic Research that found a 2 percent GRT would generate more revenue than existing taxes do, provided that all exemptions, deductions and credits were eliminated from the GRT.
Currently, Sharer said, there are more than 300 exemptions, deductions and credits. If these were eliminated, the GRT would be sufficient to pay all the expenses of the state and local governments at current funding levels, without any cuts in spending.