Republicans vote to kill bill to tax the 1% just 0.3% more
Saying New Mexico’s top wage earners “have already paid enough,” Republicans in the state House of Representatives voted along party-lines to kill a bill which would have ensured that New Mexico’s top wage earners pay closer to the same rate as our poorest working families.
Rep. Patricia Roybal-Caballero (Democrat, Bernalilo County’s South Valley) sponsored HB 21, “Phased-in Supplemental Income Tax” to raise the income tax by less than 1% on New Mexico’s highest earners.
As the state in the union with the largest percentage of income inequality in the nation – the largest gap between the top earners (sometimes called the 1%) and poorest residents – New Mexico has an obligation to close that gap, says Rep. Patricia Roybal-Caballero. “Unconscionable to me to have the lowest salaried segment of our population paying the highest percentage of taxes,” she said in testimony.
After hearing from the sponsor and an economist who explained the state’s unfair tax system, Republicans defended the status quo. Rep. Jim Smith (R-Albquerque) said that he could not support the bill because it was unfair to top wage earners. “They have already paid enough,” he said.
Rep. Bob Wooley (R-Roswell) then presented a motion to table the bill. He was supported by Chair Yvette Herrell (R-Alamogordo), Rep. Nora Espinoza (R-Roswell) and Rep. Jim Smith (R-Albuquerque).
Democrats Deborah Armstrong (ABQ), Wonda Johnson (Gallup) and Roybal Caballero (ABQ) voted against the motion to table (kill) the bill.
The top 80% of New Mexico workers pay twice the percentage of their income in taxes as the top 20% under New Mexico’s current tax structure.
New Mexico Voices for Children covers income inequality in the state:
A snapshot of how households at different income levels were doing in New Mexico as of the late 2000s (2008-2010, the most recent data available), provides a troubling picture of income inequality:
- The income of the richest fifth of households ($161,162, on average) was 9.9 times greater than that of the poorest (who earned $16,319, on average). For the nation as a whole, that number was 8.
- Income gaps between New Mexico’shigh- and middle-income households are also the largest in the nation: 3.2 times.
- The gap between the very richest and the poor is even larger: the top 5% of New Mexico households had an average income 16.8 times that of the bottom 20%.
The report, Pulling Apart: A State-by-State Analysis of Income Trends, released in New Mexico in coordination with NM Voices for Children, finds that our low- and moderate-income families did not share in the most recent economic expansion. Over the course of the last economic cycle, from the late 1990s to the mid-2000s, the incomes of New Mexico’s richest fifth of households grew by 30.2% percent while those of New Mexico’s poorest fifth grew by just 7.4%.
The bill would have raised the tax on our highest income earners, those earning more than $150,000 a year by 3/10-percent a year, phased into just 1 additional percent by 2019.