Earlier this week state revenucrats reported that New Mexico’s budget reserve had climbed to 5.3 percent — not terribly close to the goal level of 10 percent, but far better than previous estimates.
Yet there’s no question that the Land of Enchantment remains in dire fiscal shape, with so-so revenue growth, structural overspending (e.g., excessive employee compensation, higher-ed sprawl, corporate welfare), and downright terrifying unfunded liabilities.
New Mexico’s liberals have a simple solution for budget woes: repeal “tax breaks to the wealthy,” as Sen. Mimi Stewart (D-Albuquerque) calls them. But we rarely hear much about asking taxpayers to voluntarily hand over more of their hard-earned incomes.
At the federal level, the Bureau of the Fiscal Service accepts “gifts donated to the United States Government to reduce debt held by the public.” And several states permit taxpayers to contribute more taxes than legally owed.
In Massachusetts, taxpayers can elect to pay an alternate, higher income-tax rate of 5.85 percent. The “Box 22” option has been available for the last decade and a half. But as New England Public Radio reported earlier this year: “According to the state Department of Revenue, on average since 2002, 1,200 people each year … voluntarily pay more. That’s contributed to just over a quarter million dollars to the state’s coffers each year — a drop in the bucket since Massachusetts has a budget of about $40 billion.”
The phenomenon even extends to Big Government-friendly Norway. Bloomberg recently explored the country’s voluntary-contribution scheme: “Launched in June, the initiative has received a lukewarm reception, with the equivalent of just $1,325 in extra revenue being collected so far, according to the Finance Ministry. That’s not much for a country of 5.3 million people, many of whom are already accustomed to paying some of the highest taxes in the world (the top rate of income tax is 46.7 percent).”
Maybe New Mexico’s left, on some level aware that the state imposes the fifth-highest burden of state and local taxation (once adjusted for private-sector personal income), realizes that voluntary taxation in the Land of Enchantment would be about as popular as it is elsewhere. That’s good marketing on their part. Vague rhetoric about the necessity of “public investment” is a wiser tactic than demands that taxpayers “do the right thing” and choose to reduce their incomes for a government that refuses to economize.