New Mexico: Proof Positive on Income Tax Cuts
First of all, kudos to Queen Laurin for her informative report today on New Mexico Gov. Bill Richardson.
As our loyal readers are no doubt aware, we here at FITS have sung this tax-cutting Democrat's praise on numerous occasions.
And why not?
Unlike closet liberals John Rainey, Bill Gillespie and the rest of the big spending Republican bozos in South Carolina's General Assembly - all of whom have conspired to kill Gov. Mark Sanford's would-be job-creating, investment-stimulating and revenue-enhancing income tax cuts for four years in row - Richardson is a true fiscal conservative with a proven commitment to cutting income taxes and growing the economy, not government.
In doing so, he has flown in the face of the typical "class warfare" and "we can't afford to cut taxes" arguments so frequently employed by Democrats, RINO's and our own state Board of Economic Advisors.
No wonder South Carolina's economic growth remains modest at best thanks to our non-competitive income tax rate, and New Mexico's economy is surging thanks to Richardson's visionary income and capital gains tax cuts.
Don't believe us? Check the numbers for yourself.
On February 14, 2003, Richardson signed into law a sweeping capital gains tax cut and five-year income tax rate reduction, taking New Mexico's top marginal rate from 8.2% to 4.9% over a five year period.
When Richardson signed that tax relief bill into law three-and-a-half years ago, New Mexico's unemployment rate stood at 5.9% and its income tax collections were sputtering - down 11.6% (or roughly $90 million) from the previous year.
Today, unemployment in New Mexico has dropped by nearly two full points - from 5.9% to 4.1% - and the state is enjoying a $700 million surplus that's projected to grow even larger this fiscal year.
For all you thickskulled, numerically-challenged Republican legislators out there, kindly allow us to translate that for you:
When income taxes were cut in New Mexico, jobs and state revenues went through the roof.
So how would South Carolina - and its astronomical 6.7% unemployment rate - have fared if a similar plan had passed here?
Sadly, we'll never know.
Gov. Sanford's 2004 proposal to cut our top marginal rate from 7% to 5% over four years was shot down in the Republican-controlled State Senate after the John Rainey-led Board of Economic Advisors attacked the plan as being too costly.
More recently, what would have happened if we had taken some of our dramatic budget surpluses from the past two years and devoted them to job-creating tax relief as opposed to more than a billion dollars worth of new spending?
Again, we'll never know.
Instead of cutting taxes, Republican Legislators in South Carolina instead pushed a populist, revenue neutral tax swap with little to no economic value en route to growing government by 22% over the last two years.
Talk about a tale of two states.
Richardson's tax cuts in New Mexico are proof positive that income tax relief does create jobs, stimulate capital investment, encourage entrepreneurship and yes, enhance revenue.
South Carolina's continued failure to pass job-creating income tax cuts, on the other hand, is proof positive of why our state's unemployment rate continues to climb and our personal income levels continue to lag behind the rest of the nation.