New report: New Mexico’s tax burden is 5th-highest in nation

With Democrats on the hunt for higher taxes at both the State and local levels here in New Mexico, it is worth asking just how heavy the State’s tax burden is relative to other States. Conveniently, Key Policy Data which looks at state by state data on taxes and other economic indicators, just published a new series of charts which show New Mexico to have both a heavy and growing state and local tax burden.

As shown in Chart 1, when New Mexico’s state and local tax burden (tax collections divided by private sector personal income) is used as the measuring stick, New Mexico’s tax burden was the fifth highest in the nation for FY 2015 at 18.8 percent—or 31 percent above the national average of 14.4 percent.

Far from being “gutted,” as shown in Chart 2, New Mexico’s tax burden has increased over time by 65 percent to 18.8 percent in FY 2015 from 11.4 percent in FY 1950.

Chart 2 New Mexico Tax Burden by Type of Tax FY 1950 to 2015.JPG

Gov. Susana Martinez will have yet another opportunity to veto tax hikes in the wake of the 2017 special session. Unfortunately, New Mexico’s future could see political leadership that gladly accepts rather than rejects tax increases.