The president of the Rio Grande Foundation is discussing what he calls a "long-overdue" reform for New Mexico's gross receipts tax.
A rise in gross receipts tax through the state is putting more pressure on weak points in the state tax system, worsening the problem of "pyramiding," according to an Albuquerque Journal article.
"The @ABQJournal discusses momentum possibly building for long-overdue reform to NM's broken gross receipts tax. Will it happen? Will it actually result in needed reforms or be just a cash-grab?" Paul Gessing, president of the Rio Grande Foundation, tweeted.
In Albuquerque, the rate climbed by more than 2 points in 19 years, growing from 5.8125% in early 2002 to 7.875% in June, according to the Albuquerque Journal.
Pyramiding, as described by the Albuquerque Journal, is when taxes at various levels of the business chain start to pile on top of each other, resulting in individuals and businesses being overtaxed.
In a post on the Rio Grande Foundation website, Gessing said that children face the worst overall conditions of any state with the underlying issue being poverty. He said, "while raising an entire state out of long-standing poverty is not easy, a diversified and thriving economy will certainly help."
Gessing said that this issue goes across the aisle and is an issue of bipartisan concern.
He said the tax also harms small businesses and entrepreneurs that don't have the money to hire a lobbyist to get an exemption.
"For too long New Mexico’s tax structure, thanks to the GRT, has made New Mexico unattractive as a location," Gessing wrote.