We should all pay our fair share

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The Roundhouse in Santa Fe (Photo by Heath Haussamen)

The upcoming legislative session provides us a great opportunity to close the loophole that allows out-of-state corporations to avoid paying state income tax, restore some fairness to our tax code, and boost the spending power of New Mexico families.

No one likes to pay taxes, but most of us accept it as necessary to provide for essential public services. What is hard to accept, and what we should not accept, are tax policies that by chance or by design allow some people and corporations to get away with not paying their fair share of taxes.

Unfair tax policies not only deprive the state treasury of badly needed revenue – revenue to hire more teachers and police officers, repair roads or keep parks clean – such policies also understandably foster broad public resentment and weaken consumer confidence. Simply put, unfair tax policies are just plain un-American!

Fixing many unfair tax policies may seem like an unattainable goal for most New Mexicans because the policies are set at the federal level or are supported by entrenched special interests. But the New Mexico Legislature in January will have a chance to correct one such policy: the multistate corporate tax loophole that allows huge corporations doing business in New Mexico and other states to pay absolutely no corporate income tax to New Mexico.

Pete Campos

Senator Peter Wirth of Santa Fe has said he will again sponsor legislation to make out-of-state corporations pay their fair share of New Mexico income taxes. Among western states that have a corporate income tax, only New Mexico and Oklahoma do not require out-of-state corporations doing business in the state to pay state income taxes. This seemingly commonsense fix to an unfair tax policy has failed repeatedly in the past, largely due to the unbelievable claims from big corporations – surprise! – that requiring them to pay state taxes like the rest of us will hurt their business or even drive them out of New Mexico.

But what about the small businesses that have paid their fair share of taxes all along – many of which have been hurt by competition from bigger corporations? What about the increased tuition and fees that students have had to pay because the state budget is strained?

In a valiant effort to make his proposal more palatable and overcome some of those objections, Senator Wirth has said he will also propose a cut in New Mexico’s top corporate income tax rate from its current 7.6 percent to 7 percent, which is below the national median.

I support Senator Wirth’s efforts and urge others to join him in this quest for a fairer tax policy. If we all pay our fair share in taxes, New Mexico can more efficiently provide its youth and elderly with necessary services, and we will all have more take-home pay to spend on essentials and, perhaps, on a big-ticket item that previously we could not afford.

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Ironic inequity

New Mexico government does not squander the money it receives in taxes. Nearly 60 percent of the state general fund is spent on our public schools, colleges and universities. Another 28 percent goes to helping less fortunate New Mexicans with basic needs like health care, child care and income and nutrition assistance – and because New Mexico is a poor state, there are plenty of our neighbors who need help. The rest goes to public safety and other government programs.

With so much state spending dedicated to schools and human services, arguments that New Mexico kids are hurt by tax policies that allow big out-of-state corporations to escape paying any New Mexico income tax cannot be blithely dismissed as political rhetoric.

Unfair tax policies also erode already fragile consumer confidence. New Mexicans, whose checkbooks are already stretched by higher costs and smaller paychecks, are understandably demoralized to learn that they pay more New Mexico income tax than many big corporations. That inequity is especially ironic considering that most of us spend a fair amount of our money at the big box stores affiliated with those large out-of-state corporations.

The upcoming legislative session provides us a great opportunity to close this loophole, restore some fairness to our tax code, and boost the spending power of New Mexico families.

Campos is a Democratic state senator from Las Vegas and president of Luna Community College.

10 thoughts on “We should all pay our fair share

  1. Ellen – the ‘intelligence test’ and the ‘ethics test’ is supposed to be administered by the voters.  There in is part of a conumdrum.

    I’m not well informed about our tax code … the big box stores are corporations, so they file under the combined reporting system – they pay property tax and gross receipts tax – it isn’t clear to me how they don’t pay their ‘fair share’ of income tax (with ‘fair’ being what is defined by law) … that said, if earned here, the amount remaining after depreciation and expenses should be subject to the same tax as a local business.  Hopefully we aren’t talking about Walmart providing NM with financial info from all of its stores and NM swiping a percentage of THOSE profits … are we?

  2. Mick I think you and I are on the same page more than you think.  We just look at the writing on the page differently.  I believe that the perception that government is not greedy is incorrect. 

    In the Case of Mr. Campos consider that he is a life time government employee…having worked in the school system in Las Vegas and at Luna CC and in the Legislature.  Now Mick, do you see just a little conflict of interest there?  Mr. Campos a moderate to liberal Democrat has always promoted causes that promote a substantial distribution of tax revenues to the areas that he makes his living.  The funny thing about Las Vegas Mick if you look at the town is that they have two school districts…East and West….Two higher educational facilities…NMHU and LCC..A closer look will show you a town that has about 70& or more public sector employment.  The same for Los Alamos and to some but lesser degree Santa Fe.  Now Mick..do you really believe that Las Vegas NM needs two of everything?  Perhaps they could get by with just a bit less..and get out of our wallets. 

    Mick I find it a bit disturbing when someone who spends their life promoting only the public sector and is well rewarded for that effort fails to see their conflicts, and then demands fairness. 

    Having worked in both sectors I guess I just see things differently. 

  3. I believe the topic is the fairness of taxes and the sharing of the tax burden. We fought a revolution for, among other things,the right to determine how we are taxed. We did not fight because we didn’t think we should be taxed at all.

    Again, I think the topic is taxes and how to share the burden.

    Not term limits, not whether or not Manny Aragon should have been term limited. What does that have to do with tax burdens?By the way, as a Great Society Democrat, I knew Manny Aragon was a DINO when he went to Pebble Beach and broke bread with private prison interests (how ironic).

    Not whether or not Mr. Campos is a one per center or not. MJM, why are you so envious of wealth?

    Not whether or not Luna CC should or shouldn’t merge with NM Highlands. Only tangentially related to tax burden in that we could close our community colleges and save money.Following that argument, why not just neck down to two colleges; one up north and one down south? Probably not fair to our smaller communities…there’s that fairness thing again.

    So, should out of state firms enjoy a comparative advantage over local firms by avoiding New Mexico taxes? I don’t think so.

     As ever, Michael J. Flynn

  4. Mr Campos I believe you are a member of the 1% ers because if one were to figure your potential retirement income from being an educator, legislator and now persident of Luna CC I would be that your retirement income will be well over $100k per year…but Sir correct me if I am wrong.  That Sir means that you have to have $ 2 million making 5% per year just to cover a $100k pension…Now Sir I ask you to please tell me I am wrong.  Please.

  5. Mr. Campos your commentary concerns me for numerous reasons.  The #1 reason is that you are President of a community college in a Northern New Mexico Community that is very small.  It also is the home of New Mexico Highlands University, an older and more established  institution that could offer all of the courses that Luna offers.  So you live large off the State of NM.  What should happen Sir is that your institution should be merged with NM Highlands Univeristy and you Sir should look for a job in the private sector and Sir stop living large off the State of NM and residents of the county or counties that suport Luna.  The education would be better and the redundancy gone…How novel. You are a probably a member of the 1% ers that are also Democrats and members of our legislature that promote positions that are not helpful to the rest of us that strive to be in the 1%.  How about giving us all a chance to get to where you are at Sir? 

  6. Democrats don’t want term limits because you own the State. Rs are competitive now in Otero but I lived there once and every county office was in the hands of Democrats. You ran it into the ground. And voters there finally realized they aren’t libs anyway.
    As for campaign contributions, if public officials are being bought with them, the voters are the ones needing intelligence tests. All the expensive advertising wouldn’t be necessary if voters paid a little attention.  But even Dem officials are more honest than many voters. Only because they are in the spotlight of course. But even then we have the former guv, former state treasurers, majority leader of the senate, judges, Santa Fe Co sheriff, all Dems……..But ultimately, one has to blame the voters for blindly voting Democrat……

  7. I don’t think that term limits is the answer to anything.  On the state level, we have Lyons rotating for 8 years as Land Commissioner to the first round of presumably 8 years as PRC member–then perhaps back to land commissioner?
     
    In Otero County we have  Republicans in 8-year terms as sheriff, treasurer, assessor, county commissioners.  
     
    It would be nice if candidates would have to take an intelligence test, and more importantly an ehtics test  to qualify, but most importantly we need limits on campaign contributions, even better would be publically financed campaigns.  People think this would be too expensive but they never look at what the taxpayers pay for the rigged contracts and under-the table political favors, such as the “Down and Dirty Downs Deal.”. 

  8. When i read a comment by a Dem regarding “fair”, my immediate reaction is to hang on to my wallet.
    As for “entrenched special interests”, how about the public employee unions and their sweetheart deals with the Dem legislators?
    The former guv whom Dem legislators fawned over, got away with blowing millions of NM dollars on politically-inspired investments.
    A pressing need in NM is term limits for legislators. Former senator Aragon might have been saved from himself and he wouldn’t be in a special school if we had them. And his fellow-Dems let him have his way for years. A senator from Las Vegas gets an appropriation–14K?–for a party that leads to convictions, and he gets re-elected. Even introduces a bill later for an appropriation of funding for Las Vegas fans to travel to see their high school teams play…..ON and on…
    Tax corporations all we want….they just pass on the tax to consumers. How about we cut spending?

  9. So Mr. Campos and Mr. Wirth want to be the ones who define and decide what “a fair share of taxes” is for everyone.  In fact they have the only moral compass, it seems, to determine this and are giving us the benefit of this great gift they have.  So we should implicitly trust them to do that job and rest easy it is done right.  And of course Mr. Campos states emphatically that “New Mexico government does not squander the money it receives in taxes”, so we know he is correct in all of this.  Now really Mr. Campos, you expect us to swallow this?

  10. I think I first heard about this issue back in 2007 from Republican Tom Taylor.  I believe there IS bipartisan support for Wirth’s bill.  So who is holding up the show, and where do their political contributions come from?