Katie Gutierrez, Economic Reform Director of Think New Mexico, said that eliminating the tax on food would reduce the burden on low-income families who must allocate a significant portion of their limited income to groceries. This statement was made during a podcast.
"Look, this is a regressive tax," said Gutierrez. "If you only have $400 a month to spend for a family of five, 8% is quite a good chunk of that. That's several meals that you could be missing out on."
A tax on groceries in New Mexico continues to spark debate, particularly as evidence indicates such taxes tend to be regressive by requiring low-income households to spend a larger share of their budgets on food. According to a health policy podcast, every 1% increase in grocery tax is correlated with a 0.84% rise in food-insecurity risk among low-income families. The state has considered but not reinsaid a statewide grocery tax, and analysts say its reintroduction would disproportionately affect lower-income and minority communities.
Research conducted by the Institute on Taxation and Economic Policy (ITEP) found that in states with taxes on groceries, low-income families may pay a greater percentage of their income on consumption taxes than higher-income households. This pattern would apply in New Mexico given its broad-based gross receipts tax and limited exemptions for necessities. ITEP indicates these tax structures result in lower-income households facing higher effective tax rates than their wealthier counterparts.
Analysis by the Center on Budget and Policy Priorities (CBPP) shows that states which continue to impose sales or grocery taxes tend to have larger shares of income spent on food by low-income families and higher food-insecurity risk. This reinforces the argument that exempting groceries is linked to better affordability—a relevant consideration for New Mexico’s decisions regarding food-tax policy.
Gutierrez serves as Director of Tax, Budget, and Economic Development Reform at Think New Mexico. She is also a Ph.D. candidate in economics at the University of New Mexico, has been a Robert Wood Johnson Foundation Health Policy Research Scholar, and previously taught economics at Williams College. Her research focuses on tax policy, food insecurity, and health outcomes in New Mexico.
