Inside the Capitol

Sunday, March 07, 2010

Dems Find Out About Taxes

FRI, 3-12-10

SANTA FE - Some Democrats are destined for problems in the June primaries. There are certain taxes that Democrats just can't touch. The first untouchable came along in 1935, during the Great Depression.
Democrats had gained control of the statehouse by that time and devoted a major legislative session to fixing the state's tax system. Many of our state's tax laws date back, or refer back, to that 1935 session.
The major consideration was the property tax, called an ad valorem tax, on the value of the property. In New Mexico, many poor owned property. The property had been given to the people, rather than to businesses, by the Spanish crown.
Those who managed to keep from losing their property to shyster lawyers from the East, wanted to assure they didn't lose it through continued arcane tax laws because they didn't or couldn't pay.
For that reason, New Mexico has always had low personal property taxes. If you don't believe that, I'll bet you never have owned property in another state. As a result New Mexico doesn't even bother collecting much property tax at the state level. It is a local tax.
Another tax Democratic politicians have learned to keep their hands off is anything to do with cars. In many states, the poor don't have cars. That's why more people couldn't get out of New Orleans after the flooding. Out here in the wide-open spaces, everyone needs a car.
That is why taxes on purchasing a car are kept low. The motor vehicle excise tax is much less that the gross receipts tax. And don't make me pay a lot for registration or a license. And keep those gasoline taxes low. (But make sure my roads are good.)
Democrats learned their tough lesson on the gas tax back in 1994. The state law had been changed allowing state officials to run for two consecutive four-year terms and Gov. Bruce King was the first governor to get a shot at that prize.
Economic times weren't very good. "It's the economy, stupid" had won the presidency for Bill Clinton two years earlier. Teachers were clamoring for raises. Some of Gov. King's advisers got the bright idea of tacking on a six-cent gasoline tax and earmarking it for school transportation, thereby freeing up a pot full of money for other school needs.
King knew it was politically unwise. But he promised to sign it if it passed. It passed. King signed it. And Gary Johnson became our next governor. "King's" gas tax had a lot to do with Johnson's victory. It almost propelled Lt. Gov. Casey Luna into a primary election victory over King.
Now Democrats seem to be learning to keep their hands away from taxing tortillas. The idea started out as a good one, they thought. If we're going to have to tax something, why not tax things that aren't especially good for you - like junk food, sugary drinks, alcohol and tobacco?
Besides that, Republicans complain less about a gross receipts tax because it hits everyone equally. But the poor folks point out that they spend a greater proportion of their resources on such a tax. And besides, junk food tends to be cheaper and that is what the poor need to buy.
When it turned out that white flour tortillas fell into the junk food category, it hit the fan. Republicans were thrilled. Poor folks were rebelling against Democrats. Not only are Democrats supporting a regressive tax, their nanny state is discriminating against our favorite food.
Everywhere they turn, Democrats are stymied. There hasn't been a tax increase in 15 years. Times are bad. Money is needed from somewhere to keep state workers working and social programs going. The obvious answer is a progressive income tax. Soak the rich. They aren't going to vote Democratic anyway. But that won't work because the Democratic governor says he'll veto any such tax.
It's a recipe for disaster.



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