The issue of “fairness” and taxation on sales made over the Internet is back in Congress with a bi-partisan group pushing for a new taxation scheme called the “Marketplace Fairness Act designed to collect taxes on ALL sales made over the Internet.

It sounds simple, but it’s not. Forcing mom-and-pop businesses and sellers on Ebay to collect taxes and fill out forms for 9,600 taxing jurisdictions is not simple and will inevitably kill jobs and economic growth…it’s not just about the taxes, rather it’s about the compliance costs….and the “Marketplace Fairness Act” doesn’t resolve these problems.

And, while some Republicans have joined many Democrats in supporting the scheme, some Democrats have also led the way in opposing the scheme (you can click here to share your opposition with Heinrich and Udall):

Now that Gov. Martinez has seemingly jumped on the film subsidy bandwagon and will be pushing to complete a study of the program’s impact, some are wondering if we’ll finally have an answer to the question of whether the film subsidy program is an economic winner.

Of course, this implies that there is some great controversy over the economic impact of film subsidies, but there’s not. The programs are economic losers and there is plenty of information available to this effect. There’s a study by the lefty group Center for Budget and Policy Priorities.

There’s the fact that other states have been slashing their film subsidy programs.

There’s a column by liberal Michael Kinsley.

The Economist has written numerous articles including this one on the negative impact of film subsidies.

And Massachusetts is just one of many states that have found the subsidy programs provide a poor return on “investment.”

So, why have New Mexico film subsidy recipients been so successful at obtaining and keeping very generous subsidies?

1) They are Hollywood and are great at telling stories (fiction);
2) They are “cool.” Hanging out in the oil patch is not nearly as fun as meeting the cast of Breaking Bad or Jessica Simpson.
3) Classic economic case of concentrated benefits and dispersed costs. The film people know they are getting a sweet deal from the State and are organized to defend it (and obtain even more). Average taxpayers don’t see that they are getting hosed and are disorganized.

So, it is a pure political power play. What can be done to stop it? Average taxpayers need to tell their elected representatives that the film program is not a good deal and hold their Representatives and Senators (not to mention the Governor) accountable for their support of a program that takes tax dollars from average people and gives it to Hollywood studios.

Will energy-state senators Udall and Heinrich support provisions of Obama’s recently released budget that, once again, go after “Big Oil”? If their voting records are any indication, probably so, even though the oil and gas industry provides more than 13,000 direct jobs in New Mexico at an average annual salary of $64,000 and pours $2.5 billion a year into the government coffers of New Mexico.

“Big Oil” is paying a mere 41% in income taxes, compared to a wide array of other industries like “Big Computer” which are paying 25%. And whereas Apple Computer and most other industries receive a 9% tax deduction for “domestic production activities”, oil and gas companies get only a 6% deduction for those activities.

As the following chart illustrates, the oil and gas industries’ profit margins are lower than other major industries while it also pays higher taxes:

But Obama, along with Udall, Heinrich and others, thinks that is too generous and wants to incentivize one of the few industries that is actually creating jobs in America to move those jobs overseas. His recently released budget would remove current deductions and further penalize America’s largest oil and gas companies, four of which were in New Mexico’s top 10 producers as of 2011: Conoco Phillips, BP America, Exxon Mobile, and Chevron USA.

Energy-state senators Heinrich and Udall have repeatedly voted against the oil and gas industry and have pledged their support for taxes that target them, regardless of the negative impact on New Mexicans.

Studies estimate that a new energy tax will not only backfire by costing the U.S. Government $144 billion loss in revenue over 13 years, but will result in the loss of 170,000 direct and indirect jobs in the energy industry by 2014. Domestic oil production is also expected to decline by 700,000 barrels a day, a genius move when Americans are paying nearly $4.00 per gallon.

Disclaimer: the following information is from the most recent “Diploma’s Count” which tracks the class of 2009. However, as the chart below illustrates, over the 10 years from 1999 to 2009, New Mexico’s graduation rate was both lower than and more stagnant than other states in our region (I threw Florida in to illustrate the success of the “Florida Model.”)

Interestingly, Arizona was as aggressive as any among these states in terms of school choice. Utah, which graduates students at a rate that is 10%-plus above New Mexico’s spends nearly $4,000 less on a per-pupil basis than does the Land of Enchantment. The Beehive State (Utah) had adopted a “universal voucher” for school choice until the unions succeeded in convincing voters to kill the reform before it got started.

And, as much as I want to believe that New Mexico has dramatically improved its education results with the modest reforms pushed by Gov. Martinez, I await validation of these results on national reports like Diplomas Count. We’ll see.

There has been some reporting recently about New Mexico’s dropping labor participation rate. As this link shows, New Mexico is among the states in which people are leaving the work force at the fastest rate (a 4.4% drop since December of 2007).

While our unemployment rate is middle-of-the-road, our workforce participation rate is among the lowest in the nation and the lowest by far among the states bordering us AZ, UT, CO, OK, and TX. I am sure that the minimum wages adopted by Albuquerque and now Bernalillo County will help this situation….

One may quibble on the details, but economically it makes sense to have everyone who can possibly be engaged in productive activity, do so and for some support to be offered to ensure that the needy are brought up to certain minimum levels in terms of living standards. Allowing people to slip out of the work force entirely is not good.

See the chart below:

If you are an attorney licensed here in New Mexico and you support reciprocity, I encourage you to sign the following formal petition to the New Mexico Supreme Court. Please pass this along to other New Mexico attorneys.

If you or anyone wishes to sign the petition, please email us at: info@riograndefoundation.org

IN THE SUPREME COURT OF THE STATE OF NEW MEXICO

NO._________

IN THE MATTER OF A PETITION

TO THE SUPREME COURT OF THE

STATE OF NEW MEXICO TO MODIFY

RULES OF ADMISSION TO PERMIT

RECIPROCITY TO EXPERIENCED

MEMBERS OF OTHER STATE BARS

THAT GRANT RECIPROCITY TO

MEMBERS OF THE NEW MEXICO BAR

          COMES NOW the undersigned members of the New Mexico Bar to petition the Supreme Court of New Mexico, pursuant to its authority under Rule 15-103, NMRA 2012 to prescribe admission requirements for the practice of law in the State of New Mexico, and respectfully requests the Supreme Court to allow the admission of experienced practitioners by motion from other states that grant reciprocity to members of the State Bar of New Mexico.

This motion is in response to member demand for the adoption of a multijurisdictional practice system of admission, the policies of surrounding states that allows for admission by motion, as well as, for the best interests of the citizens of the State of New Mexico to receive the best quality legal services by allowing competent and ethical attorneys to move to New Mexico and compete and grow both the legal market and the economy of the State of New Mexico.  As grounds for this petition, the undersigned petitioner states as follows the following justification.

I. Changes in the Current System of Admissions and Reciprocity would benefit both clients and attorneys in the State of New Mexico

New Mexico is one of only eleven states that has not adopted any admission- by- motion procedure and still requires lawyers to take a bar examination regardless of experience and competence.  As a result, New Mexico attorneys applying to practice in other states are denied access to admission by motion in most other states.  The result is that New Mexico attorneys are denied the ability to effectively represent their clients, and their clients are denied the proper level of freedom to select their lawyers.

The practice of law is becoming a regional rather than local marketplace.

Attorneys in New Mexico are denied the ability in border- states to serve the needs of their clients.  Since all of the surrounding border-states, including most recently Arizona in 2010, have adopted admission-by-motion rules, New Mexico attorneys are left unable to compete with attorneys in surrounding states.

In addition, New Mexico attorneys are denied the ability to join the bars of other states if they and their families want or need to move to other states for personal or economic reasons.  In our increasingly mobile society in which people and businesses move with greater regularity than in previous years, it is essential that experienced attorneys have the ability to move to other jurisdictions without the fear of being impeded by their inability to move their law license   Despite many years and possibly decades of experience, competent attorneys with spotless ethical credentials are denied the simple right afforded attorneys from other states because New Mexico requires a bar examination.  It is common sense that studying for a bar examination is burdensome and sometime prohibitive in terms of time demands and the other sacrifices needed to be made by attorneys who have already been fully vetted by a proven  track record. The American Bar Association has commented in its Commission on Ethics that the effect of requiring attorneys already licensed and experienced in legal practice to take another bar exam is an “erection of an excessive barrier” that is “lengthy, expensive and burdensome”. In most other business endeavors such restraint would be actionable.

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America’s natural gas boom has helped lead to a dramatic decline in carbon emissions in the United States. Rather than pursuing “green” energy technologies that are simply not ready for prime-time, the US government should just allow US suppliers to assist China with the transition to cleaner, more-efficient energy sources? After all, the free market incentivizes efficiency in ways that governments never can. Could China one day be buying large quantities of New Mexico natural gas?

Lots of information relating to the debate on federal debts and deficits. Footage of the debate is posted below:

4-18-13 Debate from Paul Gessing on Vimeo.

The powerpoint slides are available online as well with Nick Estes’ here and Paul Gessing’s here.

Also, Rob Nikolewski of Capitol Report New Mexico interviewed Estes and Gessing prior to the event with footage posted below:

The following letter appeared in the April 17-23 edition of the Santa Fe Reporter. The letter was in response to the article “WIPP it Good” which appeared in the previous edition of the paper.

I read with interest Laura Paskus’ article on WIPP. In particular, I noted her statement that the “oil and gas industry offers relatively few jobs.” This statement is highly inaccurate. According to the New Mexico Oil and Gas Association, the industry directly employs between 12 and 15 thousand New Mexicans. If those workers all worked for one company, that would be the largest private employer in our state by far (Intel, the next largest, employs approximately 3,000).

Now that we have cleared that up, it is worth discussing the issue of nuclear storage itself. Currently, high-level nuclear waste is stored on site at more than one hundred facilities nationwide, none of which were designed for the purpose of holding such waste. It is widely-acknowledged that this is not an optimal situation and that a site like Yucca Mountain or a facility designed for the purpose in the Carlsbad area would be a superior and safer option.

While the jobs and economic impact of such a facility were it to be located in our state would be welcome, safety issues must dominate. On that, Paskus and I would agree. I can hardly imagine she thinks the current situation is preferable.

(Albuquerque) Varying levels of economic freedom, both from country to country and state to state, have been widely studied by think tanks and government agencies alike. The strong trend is for economic freedom to be correlated with prosperity.

Nonetheless, few if any reports have directly compared the burden of government across often-arbitrary Western borders.

The new Rio Grande Foundation report, “Liberty, Opportunity, Prosperity along New Mexico’s Border,” is an attempt to localize the impact economic freedom has upon prosperity in New Mexico and border regions in neighboring states. (A summary of the report is available here) The report:

• Defines economic freedom and explains how and why it varies across political borders that delineate the neighboring counties of New Mexico, Texas, Oklahoma, Colorado and Arizona;

• Explains why economic freedom is relevant and statistically measures how it leads to prosperity;

• Ranks economic freedom of New Mexico counties compared to their neighboring counterparts across state lines;

• Explores the influence federal spending has on local economic freedom and, by extension, prosperity.

Said, Harry Messenheimer, PhD, author of the report, “Unfortunately New Mexico has a reputation is as an economically-unfree state, but on a county-by-county level, economic freedom varies widely.” Continued Messenheimer, “The borders between New Mexico, Arizona, Colorado, and Texas are straight and essentially arbitrary. For that reason neighboring counties along those borders provide a particularly useful laboratory for study of how differences in state/local economic freedom affect prosperity.”

Concluded Messenheimer, “economic freedom often varied a great deal among counties, and we uncovered yet another strong link between economic freedom and prosperity. Based on private earnings per worker as an indicator of prosperity, counties with mostly high economic freedom tended to be 75 percent more prosperous than those with low economic freedom. Moreover, more federal spending was associated with reduced prosperity.”