SANTA FE, N.M. (KRQE) – Legislators took on the question: Should there be more tax brackets in New Mexico? The debate was spurred on by House Bill 119, which would change New Mexico’s income tax brackets.
Under the bill, New Mexico would be “giving tax cuts to the large majority of the taxpayers in the state who are middle-income and low-income,” the bill co-sponsor Rep. Christine Chandler (D-Los Alamos, Sandoval & Santa Fe) told the House Taxation and Revenue Committee on Wednesday. The top earners would have to pay a bit more than they currently do, Chandler adds.
Currently, New Mexico divides income into five tax brackets. Here’s a table of those brackets for married individuals filing jointly (single and separate filers have different brackets, but there’s still five brackets for each).
|Taxable income (Married filing jointly)||Tax rate|
|Not over $8,000||1.7%|
|$8,000 – not over $16,000||3.2%|
|$16,000 – not over $24,000||4.7%|
|$24,000 – not over $315,000||4.9%|
House Bill 119, sponsored by a handful of Democratic legislators, would effectively decrease taxes for the lowest-earning New Mexicans, according to an analysis by the Legislative Finance Committee. At the same time, the bill would raise the tax rate for the highest-earning New Mexicans.
About 41% of all New Mexicans would be in the lowest bracket under the bill. That’s the same percentage as are currently in the lowest bracket in the existing system. Single filers earning less than $110,000 per year would pay less than current rates under the bill, according to the Legislative Finance Committee.
In Wednesday’s House Taxation and Revenue Committee, multiple members of the public spoke in support of the bill. Many commenters noted that by restructuring the state’s tax brackets, the state’s revenue stream might be more stable.
Opponents, including those representing small business organizations, said now is not the time to raise taxes for anyone. Carla Sonntag, from the New Mexico Business Coalition, expressed concern that if high-income earners have to pay higher taxes, they might simply choose to leave New Mexico.
On Wednesday, the committee decided to pause discussion on House Bill 119. They’ll resume discussion on Friday, February 10.