Stimulating New Mexico’s Economy by Phasing out its Personal Income Tax

National economic growth has been slowing recently. As a result Congress has passed a so-called “stimulus-package” ostensibly designed to give the economy a boost, most economists believe that putting checks in the mail, without permanent, positive policy changes will do little for the national economic outlook.

The stimulus checks people receive will eventually have to be paid back in the form of taxes and they do nothing to improve the economy because they do
not change the incentives to work, save, invest, or take risks. While we may not be able to rely on Washington, New Mexico’s policy leaders could stimulate the state’s economy in the short-term and improve its long-term economic prospects by phasing out the state’s personal income tax over the next four years.