Commentary: Santa Fe--The much anticipated final report on New Mexico’s Tax System is in. State Senator Bill Sharer (R-Farmington) said it now gives legislators a credible model or so-called computerized “tool” to evaluate potential tax reduction scenarios. Sharer said the study researched tax numbers for the computer program that will be more broadly accepted as being credible and not created by someone with an agenda in order to keep their favored tax credit, deduction or exemption.
After the final report by the notable Ernst & Young Accounting Firm was presented to the Revenue Stabilization and Tax Policy Committee today, Senator Sharer said there are no more excuses not to do the much needed tax reform. He said the report has provided an accurate tool to demonstrate the impacts for specific tax bases changes, i.e., tax cuts. He said because tax revenue is up dramatically so far this year, largely due to increases from the oil and gas industry, the additional new revenue creates a cushion for the next budget if there is indeed tax reform and it needs some tweaking to get it just right.
“We want our tax system fair and simple and to raise enough money for critical state programs while it is low enough to attract new businesses with jobs to our state,” Senator Sharer said. “Now is the time for fair tax reform for everyone. No more excuses.”
Senator Sharer said one large finding in the report indicated that New Mexico’s tax rates are very competitive with surrounding states when all of the business tax credits are figured-in. But he said not all business have a slew of accountants and attorneys on their payroll to find all of those credits and are turned off and turn away from the state because of the high pre-credits of 12.6% on services and 9.5% on manufacturers. Senator Sharer said the tax rates could be as low as 2% if everyone paid their fair share.
Those presenting today’s report are: Andrew D. Phillips, Principal, Quantitative Economics & Statistics (QUEST), Ernst & Young, LLP (EY), Caroline M. Sallee, Senior Manager, (QUEST, EY), Robert D. Bushchman, Ph.D., Senior Research Associate, Center for Fiscal Research, George State University
Senator Sharer has said:
“I have always worked for tax reform at is simple enough for the average tax payer to understand while it raises enough moneyto pay and bills and is attractive for new industry so we can grow our economy,” Senator Sharer said. “After fighting for over five years for meaningful tax reform, I am encouraged that this study, along with the computerized tool, will give us confidence that overhauling our tax to make it more fair for everyone and less cumbersome will work. We can reform our tax system and still raise enough taxes for critical government services.”
Senator Sharer said the computerized “tool” or program that Ernst & Young has developed can be used to analyze, among other things, how eliminating the numerous tax exemptions, credits, and deductions and substituting a more fair system will affect the state’s revenue.