New Mexico Republicans Call to Eliminate State Income Tax, Provide $2 Billion in Tax Relief 

For years, New Mexico has enjoyed record-breaking budget surpluses fueled by strong energy revenues. Yet despite overflowing state coffers, taxpayers continue to shoulder one of the largest tax burdens in the west while seeing little in return. Instead of settling for another temporary rebate check, New Mexico Republicans are now calling for something far more meaningful: eliminating the state’s personal income tax altogether. 

House Republican leaders Gail Armstrong, Rebecca Dow, and Alan Martinez recently urged Governor Michelle Lujan Grisham to convene a special legislative session focused on repealing the state’s personal income tax. Their proposal came in response to the governor’s suggestion of sending taxpayers a one-time $250 rebate funded by an unexpected oil revenue windfall. While any tax relief is welcome, Republicans correctly argued that a permanent reduction in taxes would provide lasting economic benefits long after a rebate check has been spent. 

The difference between these two approaches could not be clearer. A one-time rebate is a short-term political gesture. Eliminating the income tax is structural reform that would allow New Mexicans to keep more of every paycheck they earn, every year. 

The Republican proposal to eliminate the income tax would bring over $2 billion in relief to New Mexicans. Putting $2 billion back into the pockets of working New Mexicans will stimulate economic growth, create new opportunities for businesses to be created and thrive, and force New Mexico Democrats to consider legitimate spending cuts that shrink their government’s grapple on their constituents’ lives.  

Eliminating the income tax would be a strong move towards creating a more competitive tax environment in the state. Many of their neighbors have made similar strides already. Texas and Nevada have no income tax. Arizona, Colorado, and Utah have moved to flat income tax rates. Oklahoma is actively working through legislation to move their income tax onto a pathway towards complete elimination. To maintain competitiveness, New Mexico should take inspiration from their neighbors and move forward on eliminating their income tax. 

Americans for Tax Reform applauds New Mexico Republicans for thinking beyond temporary political fixes and advancing a vision centered on permanent tax relief. If the state can afford record spending and recurring budget surpluses, it can certainly afford to let New Mexicans keep more of their own money. The time has come for New Mexico to join the growing movement toward lower taxes, greater economic freedom, and ultimately, the complete elimination of the state income tax.