Corporate Welfare Comes to Santa Fe (Again)

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Voters simply do not have any appetite for broad based tax breaks this year, especially those that would go to the wealthy and big business. – Third Eye Strategies

As working families struggle to make ends meet; as wages stagnate; as the middle class erodes; and as corporate profits reach new heights you might hope that your representatives in Santa Fe are doing everything they can to build an economy that works for everyone.

Some legislators certainly are, others, not so much.

The House Republicans’ obsession with corporate welfare was on display today in the House Ways & Means Committee as Rep. James Strickler presented a bill to reduce the corporate tax rates of people who net over $500,000 a year.

You may recall that just two years ago a controversial corporate income tax break was rammed through in the last seconds of the session that reduced the corporate income tax rate by over 2% (from 7.9% to 5.6% over five years).

Such a reduction was supposed to lure out-of-state companies into the state (Hello Goodbye, Tesla!) and create good jobs. How’d that work out for us?

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New Mexico is the most unequal state in the nation…and Rep. Strickler wants to further widen the wealth gap.

Cities around the state are hurting from the repeal of the Hold Harmless Act that was used to pay for the 2013 corporate tax cut and are imposing new taxes to make up for lost revenue…and Rep. Strickler wants to cut the corporate tax rate even further.

The Legislative Finance Committee says Rep. Strickler’s bill will reduce corporate income tax revenue to the general fund by $47 million by 2019…and Rep. Strickler still wants to do it.

The Legislative Finance Committee says, “This bill may be counter to the LFC tax policy principle of adequacy, efficiency and equity. Due to revenue reductions pursuant to this tax rate reduction revenues may be insufficient to cover growing recurring appropriations”…and Rep. Strickler still wants to do it.

It’s abundantly clear that conservative tax policies are hitting our state hard. Also clear is that New Mexicans don’t want the sort of economic policies being pushed by conservatives in Santa Fe.

A January poll found that New Mexicans overwhelmingly want lawmakers to make strategic investments in the sorts of things that will make our state fulfill its potential: education, healthcare, jobs. From the poll (emphasis mine):

Legislating comes down to choices, and voters overwhelmingly prefer “investing in key priorities like education, healthcare, and job creation” (62%) over “reducing taxes on businesses and individuals” (19%) when forced to pick. Just 15% volunteer both. Voters get that New Mexico needs investments in its people. When it comes to taxes, voters slightly prefer “targeting tax incentives to just small business in New Mexico” (41%) over “reducing taxes on all businesses in New Mexico” (32%). Voters simply do not have any appetite for broad based tax breaks this year, especially those that would go to the wealthy and big business.

And just yesterday an Associated Press-GfK poll was released that echoes these state-level findings on the federal level. People overwhelmingly agree that the rich are taxed too little and agree with President Obama’s proposals to raise certain taxes on higher-income earners. From the AP article about the poll:

According to the poll, 68 percent of those questioned said wealthy households pay too little in federal taxes; only 11 percent said the wealthy pay too much.

One proposal would increase capital gains taxes on households making more than $500,000. In the survey, 56 percent favored the proposal, while only 16 percent opposed it.

 Thankfully, Rep. Strickler’s bill was tabled in the House Ways & Means Committee this afternoon.