On Saturday, the Senate Taxation, Business, and Transportation Committee voted 7-4 on H.B. 291 to advance a sweeping tax hike on New Mexicans making over $500,000 annually while also phasing out other tax breaks passed in 2013.
During committee comments, Sen. Bill Tallman (D-Bernalillo) made quite a fuss over the bill increasing taxes while loads of government money was coming in to help the state. He pondered whether this was the right time for such an action.
“Now that we’re learning that we’re going to get a considerable amount of money from the federal government, I was wondering what we are so determined to increase taxes because I would be… in favor of increasing the working families tax credit and the LICTR (Low-Income Comprehensive Tax Rebate), and forget about increasing taxes for a year or two because they’re raising such a small amount.” He added, “The income tax is only going to raise $40 million. That’s what, one-third of one percent of our $7.3 billion budget,” said Tallman.
He said, “I hate to argue with you against my good friend, Peter Wirth–Senator Wirth. And I was just wondering why we’re so determined to raise taxes–which I’m not against raising taxes maybe down the road–but why are we so determined to raise it in light of the fact that we’re so flush with money coming in this year?”
Sen. Peter Wirth (D-Santa Fe) responded, saying that the tax hike was meant to be a “recurring” partial fix to a “permanent problem” with what he described as waning oil and gas revenues.
But despite Tallman lobbying against raising taxes in the current legislative session, he voted for S.B. 291 anyway.
The bill would ultimately harm businesses that are already struggling due to the COVID-19 pandemic and which employ low-income workers in the state. The new tax hike would disincentivize businesses from investing in New Mexico because higher-income business owners would not invest in the state due to over-taxation.
There are many other proposals working their way through the Legislature that will directly impact lower-wage workers and working families, notably S.B. 11, which is a clean fuel standards bill that would ultimately raise the price of gasoline to over 20 cents per gallon–crippling the poor.
The bill now heads to the Senate floor, and despite Tallman’s manufactured concern in the Tax Committee, it appears he will likely vote for the measure on the Senate floor.