KRWG

Flush The New Mexico Food Tax Once and For All

Dec 27, 2016

Commentary: We flushed it down, but it keeps coming back. The Roundhouse is talking about a food tax again.

 

New Mexico used to include groceries and prescription medications in gross receipts taxes. The legislature put a stop to it 2004 but lawmakers, struggling to find revenue for state operations in the years since the Great Recession, have attempted to bring it back more than once. This time, it is included in a proposed package of tax reforms presented by Representatives Jason Harper of Rio Rancho and Bill McCamley of Las Cruces.  The bill is still in the works, but the idea is to include food groceries in a lowered GRT. The lawmakers are arguing that this will not raise taxes on the poor, but merely redistribute them in a way that will be neutral. At a hearing in Santa Fe, McCamley said: "What happens is that at the very very least, you come out even because you’re getting the same amount of money you would’ve spent on food tax anyway...but...you’re paying less of a tax on everything else that you’re buying.”

 

Besides the challenges of proving that claim to voters, it doesn't address the basic injustice of taxing groceries in a state that ranks highest for child poverty and where one in three children, according to a study this year by Feeding America, do not have reliable access to nutritious and affordable food, and half of children aged 4 and under rely on food assistance. We are a state that punishes its children for their families' poverty. This is morally cruel and has rippling policy effects. For instance, widespread early childhood hunger is a factor in poor school performance.  Meanwhile, the New Mexico Human Services Department is notoriously understaffed and compromised, and the state has fought to institute work requirements and cutoffs to food assistance despite qualifying for federal waivers - turning away federal money to help feed the hungry because of a pernicious ideology that government help is bad for your character.

 

When elected politicians start talking about sharing the burden with respect to budgets and revenue, it is time to listen very carefully and keep an arm around your purse. Across-the-board taxes do not affect everyone equally, because stark class inequities persist. New Mexico has lowered income tax rates for its highest earners, reduced corporate taxes, and allowed deductions for capital gains income. These privileges are defended as necessary for job creation and investment. Meanwhile, the working class are affected the most by cuts to education, public legal services, and economic aid in an economy that still depends too heavily on oil and gas at the expense of investing in other sectors.  Let's be clear about this: the poor are not sharing a burden, they are already burdened the most. We are not all in the same boat. In a context where a few people do very well even as long-term unemployment in New Mexico remains high and we continue to shed jobs, taxing groceries is simply not appropriate.

 

If we can understand the concept that taxing internet sales relieves our small businesses of an unfair disadvantage, we can apply the same principle to the majority population of a state where the working poor struggle to feed themselves and their families.

 

A package of simplified taxation with more progressive policies and badly needed downward distribution, targeted to diversify the economy, stimulate demand, and reduce the need for humanitarian relief is a critical undertaking, but regressive schemes are not the way to go. Taxing groceries belongs to our past.

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Algernon D'Ammassa writes the "Desert Sage" column for the Deming Headlight and Sun News papers. Write to him at DesertSageMail@gmail.com.