A taxing survey: NM still in 38th place nationally
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STILL STUCK: For the third year in a row, New Mexico finished 38th in a national study of tax business climate.
By Rob Nikolewski │ New Mexico Watchdog
SANTA FE – When it comes to weather, the climate in New Mexico — 300 days of sunshine annually — is hard to beat.
But when it comes to taxes? New Mexico’s climate ain’t so good.
According to the , a fiscally conservative think tank based in Washington, D.C., New Mexico ranks 38th in the country in .
The index looks at a number of taxes in individual states, including sales taxes, individual taxes, corporate taxes, unemployment taxes and property taxes — and it ranks states accordingly.
“When a state imposes higher taxes than a neighboring state, businesses will cross the border to some extent,” . “Therefore, states with more competitive tax systems score well in the index because they are best suited to generate economic growth.
By that measure, New Mexico isn’t faring so well.
As you can see by the map, all of New Mexico’s border states have lower tax burdens:
In fact, west of the Great Plains states, and with the exception of California — 48th worst — New Mexico has the worst tax climate of all other states, according to the Tax Foundation’s methodology.
But the news isn’t all bad in the Land of Enchantment.
The authors of the study wrote, “While not reflected in the current Index edition, signed legislation this year that will lower the corporate income tax rate from the current 7.6 percent to 5.9 percent by 2018, in part by tightening the jobs credit and film credit. New Mexico currently has the highest corporate tax rate among its neighbors, and this cut will improve its competitiveness in the region.”
New Mexico has finished 38th in each of the past three years of the study.
The Tax Foundation rankings were released Wednesday. Within hours, critics from the political left pounced on the news.
the study, because California and New York — which finished dead last — are “pillars of America’s very successful high-tech, finance, and media industries.”
The authors of the Tax Foundation rankings , “Those high-tax states also have other non-tax qualities — and often legacy investments and industries — that overcome the obstacle of a broken mess of a tax system for many businesses and individuals.”
The top 10:
|
1. Wyoming
|
| 2. South Dakota |
| 3. Nevada |
| 4. Alaska |
| 5. Florida |
| 6. Washington |
| 7. Montana |
| 8. New Hampshire |
| 9. Utah |
| 10. Indiana |
The bottom 10:
|
41. Maryland
|
| 42. Connecticut |
| 43. Wisconsin |
| 44. North Carolina |
| 45. Vermont |
| 46. Rhode Island |
| 47. Minnesota |
| 48. California |
| 49. New Jersey |
| 50. New York |
“Expect the Republican Governors Association to celebrate the rankings: Seven of the top 10 states are run by Republican governors, while seven of the bottom 10 states are run by Democrats,” the .
to read the entire 56-page report.
Contact Rob Nikolewski at and follow him on Twitter @robnikolewski
Posted under Blog.
Tags: Matt Yglesias, Slate, Susana Martinez, Tax Foundation, Washington Post
9:55 pm on October 10th, 2013
From the full report…
The absence of a major tax is a dominant factor in vaulting many of these ten states to the top of the rankings. Property taxes and unemployment insurance taxes are levied in every state, but there are several states that do without one or more of the major taxes: the corporate tax, the individual income tax, or the sales tax. Wyoming, Nevada, and South Dakota have no corporate or individual income tax; Alaska has no individual income or state-level sales tax; Florida has no individual income tax; and New Hampshire and Montana have no sales tax.
But this does not mean that a state cannot rank in the top ten while still levying all the major taxes. Indiana, which ousted Texas from the top ten this year (see p. 5), and Utah have all the major tax types, but levy them with low rates on broad bases.
3:02 pm on October 11th, 2013
I cannot see a direct connection between this statistic of “business tax climate” and how well a state is doing economically or otherwise. The map seems to indicate that it doesn’t much matter to the well being of a state.