The Journal’s Winthrop Quigley responded to the Rio Grande Foundation’s recent op-ed appearing in these pages by assembling a team of ideologically sympathetic economists from around New Mexico to generate a six-page policy brief. Clearly, our work is touching a nerve.
The paper, which we have reviewed, contains some points of agreement (the gross receipts tax in its current form is seriously flawed) and many more points of disagreement, but neither in his most-recent column, nor in their paper, do Quigley and friends ever make a clear (let alone convincing) case for raising taxes on hard-working New Mexicans.
The tax-hikers’ most compelling point is that when state and local burdens are taken together, New Mexico’s overall tax bill is slightly below average. A 2016 Wallethub report places New Mexico 26th among US states in this regard, with a burden that is 0.48 percent less than average. That hardly justifies tax hikes. Delaware, for example, imposes a burden that is 44 percent below average. Does that mean their politicians must raise taxes immediately? Hardly.
Besides, we agree with Quigley’s economists (and most any economist around) that New Mexico’s tax structure is deeply flawed. So let’s come together to reform the gross receipts tax in ways that don’t lead to rent-seeking among interest groups while causing pyramiding and chasing small businesses and entrepreneurs out of state. Why make a bad system (and New Mexico’s struggling economy) worse by increasing the burdens it imposes?
It is worth reminding readers that our response to Quigley came after three separate columns from him arguing for higher taxes. He has now taken a fourth column to respond to our response.
