New Tax Package in New Mexico
New Mexico lawmakers have proposed a $959 million new tax package to make the state’s tax code more progressive. The package includes a range of measures, such as reducing the gross receipts tax rate, creating two new tax brackets in the personal income tax system, and increasing alcohol taxes. One of the most significant features of the package is the expansion of the child tax credit, which would enable parents to receive up to $600 per child tax break based on their income level. Additionally, the package includes a rebate of $300 for New Mexico taxpayers who filed tax returns in 2021.
The new tax package intends to improve the fairness of the tax system in the state, which is heavily reliant on revenue from the oil and gas industry. By using this revenue to fund tax cuts and credits for families, lawmakers aim to make the tax code more progressive and support working families in New Mexico.
Despite the positive aspects of the package, some business groups have criticized the measures as disappointing and harmful to businesses in the state. However, according to ABQ Journal advocates for the child tax credit and other policies argue that more than 90% of taxpayers would see a tax cut under the proposed personal income tax code changes.
The final bill’s version is expected to go to the House floor after passing the House Taxation and Revenue Committee on a party-line vote and then move to the Senate. The proposed tax package highlights the ongoing debate around tax reform and the need to balance the interests of businesses and working families. With the proposed tax cuts and credits, the tax code in New Mexico could become more progressive, benefiting a significant proportion of taxpayers in the state.