It's a time-honored, if puzzling, tradition. Elected officials pledge to put everything on the table in a relentless quest for tax reform -- except for a handful of tax breaks that they personally hold near and dear. New Mexico Governor Bill Richardson is the latest leader to pull this disheartening stunt.
Earlier this week, with the state facing a $400 million deficit, Richardson expressed his willingness to repeal various tax loopholes to help balance the budget. Unfortunately, Richardson continues to oppose closing one of the most unfair tax giveaways in the state's tax code: a 50% exclusion for capital gains income that he pushed through in 2003. He also dismisses the idea of reforming the state's $80 million film production tax credit.
This guidance doesn't leave lawmakers with a lot of sensible options for reform. They should ignore their governor altogether and look for answers in a new report from New Mexico Voices for Children, which presents a more open-minded menu of revenue-raising options that could help make the state's tax system simpler and fairer. These options include repealing the capital gains break, enacting combined reporting for corporate income taxes, and repealing income tax rate cuts enacted in 2003.
When New Mexico lawmakers convene for a special budget-balancing session this fall, the Voices for Children report will serve as a much better template for solutions than Richardson's half-hearted gesture towards loophole-closing.