Wake up New Mexico! The State Legislators in NM are Robbing Us Again!
Ed. Note: NM is trying to raise all kinds of taxes to cover their tax decreases that they gave us. Be aware they are robbing Peter to pay Paul and trying to make us think that they really are for lower taxes. This is not true. It is the same old NM government that is anti-business. If they really want to be pro business then they need to cap all income taxes, get rid of gross receipts tax in favor of higher sales taxes, rescind all compensatory taxes for business, and get rid of capital gains taxes. Why do this? Because high taxes cause businesses to stay away unless, of course, the state or regional groups offer special tax holidays. This is very bad policy because why punish those businesses who have been in the state in favor of new businesses that are coming here for economic development? Lower taxes create an economic vacuum for states. What this means is that companies will come here if there are lower taxes, educated workforce, and quality of life for their workers. NM is so far behind on this issue because of woodenheaded policies that drift out of the People’s Republic of Santa Fe. It must stop now. Citizens cannot have economic freedom if the state continues it onerous taxation policies. The article below is more evidence that increasing taxes lowers revenues. While the state is NY, it applies here.
MGA
NMIRI
BLOWING SMOKE WITH THE CIGARETTE
TAX
With many states now
running their largest budget deficits ever, legislators
are looking anew at raising cigarette taxes. Even though
these taxes have been raised sharply in almost every state in
recent years -- on top of price increases mandated by the tobacco
settlement -- politicians still seem to think that this cow
can be milked even more. Now, several new studies suggest that
there are diminishing returns to higher cigarette taxes. New
York City is probably the best example of where cigarette taxes,
which now total $3.00 per pack, are so high that a tax cut would
probably raise revenue. A new report from the Small Business
Survival Committee notes:
o The city is getting
less than half the revenue increase expected
from last year's tax hike from 8 cents to $1.50 per
pack.
o As a result of higher cigarette taxes within the city, the State of New York claims 46 percent of the higher revenues collected.
o Thus, out of the $250 million, New York City was only going to get $107 million of additional revenue even if everything went as planned.
The report also found:
o Cigarette sales from legal sources fell much more than expected -- by 189 million packs.
o The loss of cigarette sales, ancillary product sales and income to businesses and workers and the loss of about 10,000 jobs reduced New York City's tax revenue by $64 million.
o Thus the city's net revenue from its $250 million tax increase turns out to be just $43 million. Some of the lost sales undoubtedly resulted from reduced demand -- people quitting smoking or cutting back. However, it appears that smuggling, out of state urchases and sales on Indian reservations (where no taxes are collected) are the main reason. Source: Bruce Bartlett, "Blowing Smoke With the Cigarette Tax," NCPA, March 17, 2003.
For text
http://www.ncpa.org/edo/bb/2003/bb031703.html
For study text
http://www.sbsc.org/LatestNews_Action.asp?FormMode=Releases&ID=304
For more on State and Local Taxes