Temporary Tax Hikes…Really?
Governor Richardson seems adamant in asserting that whatever tax hikes he pushes through during the 2010 legislative session will be “temporary.” Of course, this promise is ridiculous on its face because this is his final legislative session in office and he won’t be around to determine whether the hikes he enacts will be temporary or not. Pretty silly of him to make this promise or for anyone to believe him if he has a 0% chance of backing this up.
Of course, this is not where the silliness stops. According to the morning papers, Richardson is considering “sin” taxes on soda pop, cigarettes, and junk food. So, you are the next governor of New Mexico and, while the economy has improved a bit over the 2-3 years since these “temporary” tax hikes were enacted, you now have to stand up and “cut” taxes. How exactly are you going to sell these supposed tax breaks for tobacco, soda, and junk food?
The reality is that these will be permanent taxes because it will be politically impossible in the future to reduce taxes on products even though they disproportionately consumed by the poor cigarettes and soda. Rather than balancing New Mexico’s budget on the backs of the poor, Richardson (and the Albuquerque Chamber) should focus on cutting New Mexico’s bloated government bureaucracy and spurring economic growth.
The effort to raise revenue to address the current state budget deficit by enacting “sin taxes” misses the larger point: the State has spending priorities and commitments that do not match present day economic reality. The single largest contribution to the state general fund has been taxes from the extractives industries: oil, gas, mining. While local consumers may not directly impact wellhead/ton pricing, restricting leases (as endorsed by Gov. Bill) on public land for those industries makes the cost of exploration and resultant supply more expensive and limited. As in any business, budgetary cuts to maintain profitability are made, often painfully, when revenues lessen. Where is this commitment level from state government? In two words, LIMIT SPENDING!
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[...] recently penned an expansion of my recent blog posting on temporary tax hikes for the Deming Headlight. Read the article [...]
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