2010 The Year of the Tax Increase
Some of these tax increases, if passed, would take effect TOMORROW. I kid you not. Proposed income tax increases would begin tomorrow and are designed to take $327,971,000 out of our pockets over the next five years and give it to elected officials to make up for their spending spree over the last seven years. Now, while the economy, at least temporarily, does not seem to be getting worse, it also doesn't seem to be getting any better. Unemployment numbers are holding steady at levels not seen since the 1940's:
New Mexico's jobless rate remained steady at 7.8 percent in November, the same as the previous month but much higher than the 4.6 percent rate in November 2008.
The national unemployment rate in November decreased to 10 percent.
The state's labor department, the Department of Workforce Solutions, says the state lost 25,400 jobs over the past year.
The department says the decline in the number of jobs is the worst New Mexico has seen in modern times and it will be a number of years until employment reaches pre-recession levels.
That's right, it will be many more years until we get back to healthy rates of employment and a growing economy. Yet, for those of you lucky enough to be holding a job, you're going to find yourself, not only working harder because you're doing the work that used to be done by two or more people, but also working for less, because state government is going to be taking hundreds of millions of dollars out of your pocket.
Remember all tax increases are permanent. It's just the nature of the beast. Consider this from the report:
The gross receipts tax was first levied in 1934 (as the emergency school tax) as a temporary measure to keep the schools open; it was made permanent in 1935. The tax applied to almost all business sectors, including services. This contrasted markedly with other early-adopter states, like Mississippi, which taxed only sales of tangible goods. In 1966, the tax was reorganized and renamed as the gross receipts tax.
Government always uses some sort of "emergency" to rationalize its takings, be they individual freedoms or financial. However, long after the "emergency" has subsided, what was supposed to be a temporary measure becomes permanent. There are those who think it is time to raise these GRT taxes even higher. Yet, consider that:
The table following the map shows that New Mexico’s average tax rate is the 28th highest out of the 46 states with a sales tax. However, New Mexico ranks fifth highest in terms of sales tax revenue as a percent of personal income, a result of both the relatively low level of personal income in New Mexico and the broad base of New Mexico’s gross receipts tax.
What, fifth highest in terms of sales tax revenue is not high enough? We want to be number one? I really don't see how being at the top of this list would be a good thing. Let me put this in another perspective, total GRT collected from us, the taxpaying public, in 2004 was $2.3 BILLION. Five years later, the economic crisis has resulted in only $3.2 BILLION taken from our bank accounts.
Wait a second! That's not a decline in GRT. That's an increase in GRT revenue ! In fact, that's a 38% increase in taxes in collected. Now, ask yourself, am I making 38% more today than I was five years ago? If the answer is yes, well, you're lucky. But, the truth is that as a whole we're only making about 22% more today than we were in 2004. If the government thinks they are in a crisis, then the taxpaying public must be beyond crisis. Yet, they want to raise our taxes even more.
I could go on, but I think you get the point. State government IS NOT in a revenue crisis situation. The problem is that spending has been out of step with reality for many years now. At the very least, we should be cutting expenses back to 2004 levels. If you doubt me, then ask yourself, are my neighbors, family and friends better off today that they were in 2004? I'd be very surprised if you could answer that with a "yes".
If you're the type to make New Year's Resolutions, I've got easy one for you to make. Resolve to call your legislators and the Governor, assuming you can locate him, and let them know if they like elected office, they will cut spending to bring it in line with our income growth before considering a single additional tax.