New Mexico Economic Development and Revenue Strategy
The State Should Pursue Tax Policy Changes to Improve Equity, Reduce
Volatility, and Better Position New Mexico to Meet Future Needs
◆ Reforming the PIT rate structure. Reinstituting a rate structure with higher marginal PIT
rates at higher income levels can make New Mexico's tax structure more progressive and
equitable, significantly increase General Fund revenue, and reduce reliance on other
revenue sources.
◆ Eliminating the capital gains PIT deductions. Lower capital gains rates or deductions
significantly reduce progressivity in State income taxes specifically and the State tax
structure in general. The exemption also undermines revenue sufficiency in the State tax
structure, reducing State tax revenue collection by tens of millions of dollars per year.
Reinstituting an estate tax. Implementing an estate tax with exemptions for estates
below a certain threshold will make New Mexico's tax structure more equitable, given that
the current tax treatment overwhelmingly favors very wealthy individuals.
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