Lower Taxes – Period: The Right Way to End the Food Tax

Two bills to increase taxes were introduced in the February 2000 legislative session. The purpose of each bill was to provide enough revenue to eliminate the Gross Receipts Tax on groceries1
in New Mexico. The worthy goals of the two bills were to help the poor and reduce hunger (particularly among children) in New Mexico. Tax revenue lost from groceries would be replaced either 1) by increasing the tax on cigarettes by 60 cents per pack or 2) by increasing the tax on cigarettes by 25 cents per pack and by increasing the Gross Receipts Tax rate by one- quarter of one percent. By taxing cigarettes the bills also would purportedly reduce the problems of youth smoking and high health care costs. The purpose of this assessment is to examine the bills and their goals: Will the intended goals be achieved should one of the bills become law?