Tax Policy Briefing: Why Does New Mexico's Economy Underperform Compared
To Its Neighbors?
"It's your taxes. They're the highest in the region and everyone
knows it ."
Governor Bill Owens of Colorado
By Harry Messenheimer, Ph.D.
President, Rio Grande Foundation
September 24, 2002
Taxes are being featured prominently in this year's gubernatorial campaign.
While promising lower taxes for New Mexico, major party candidates
appear to be taking positions that outdo one another. What wonderful news!
New Mexico needs lower taxes. We have an anemic economy, and high taxes
are one of the main reasons. This study begins by documenting just how
anemic our economy is. Then we present evidence that too much government
interference in the economy, including too high taxes, is the reason for
Next we go to discussion of specific taxes and their harms. New Mexico
is compared to other states, with emphasis on the region, for each of
the major tax bases. In this section we also discuss the harm imposed
by the somewhat disguised tax on welfare recipients.
Finally, in the context of interstate comparison of tax harms, we discuss
specific tax reduction proposals and estimate their effects on job creation,
wealth creation and tax revenues. Also, in the context of recommended
reform we assess specific proposals to exempt groceries and medical services
from the gross receipts tax, lower the capital gains tax and lower the
corporate income tax.
Download Adobe Acrobat document of