A VISION FOR A BETTER NEW MEXICO
Four Steps to Zero
A Proposal to Phase Out New Mexico's
Tax on Eligible Personal Income.
Keep More of What You Earn While Protecting Essential Services.
Gregg Hull proposes four conditional steps to phase out New Mexico's tax on eligible personal income, including qualifying wages, retirement income and personal investments.
Four years is the goal. Every step would require legislative authority, funded services, financial safeguards and readiness to deliver the change.
The proposal would give New Mexicans more control over their own income while putting funding for classrooms, healthcare, public safety and eligible refundable benefits first.
Four years is the goal. Every step would require legislative authority, funded services, financial safeguards and readiness to deliver the change.
The proposal would give New Mexicans more control over their own income while putting funding for classrooms, healthcare, public safety and eligible refundable benefits first.
Start With the First Portion of Your Income
The plan would expand the portion of eligible personal income that is free from state income tax:
- Step One: The first $25,000 for single filers and $50,000 for married couples filing jointly.
- Step Two: The first $50,000 for single filers and $100,000 for joint filers.
- Step Three: The first $100,000 for single filers and $200,000 for joint filers.
- Step Four: All remaining eligible personal income.
These amounts apply to taxable income after relevant deductions and exemptions, not to gross salary. Earning above a band would not take away its benefit. Tax could still apply to eligible income above that band.
Married-separate filers would use the single bands. Heads of household and qualifying surviving spouses would use the joint bands. Each filing status would retain its applicable underlying tax schedule.
Fund Classrooms, Healthcare and Public Safety First
Tax relief must account for the services New Mexicans depend on. Before any step could proceed, the proposal would require funding for:
- Classroom instruction, student services and necessary school support.
- Healthcare obligations, public safety and justice.
- Eligible refundable tax credits and rebates.
- The staff, systems and payment processes needed to administer the changes.
The actual cost of protected services would take priority over the plan’s spending-growth target. If those costs require a higher budget, the affordability review must include that budget. If the requirements cannot be met, the next tax reduction waits.
Preserve Tax Benefits Families Rely On
The proposal would preserve eligible refundable credit and rebate formulas and fund their delivery through the Taxation and Revenue Department. Eligibility rules would still apply, and a return or other claim may still be required.
Tax relief would not depend on moving families into an unbuilt replacement benefit system.
Tax relief would not depend on moving families into an unbuilt replacement benefit system.
Keep Net Business Profits Taxable
The phaseout would apply to defined personal income. Net operating-business profits, net rental profits, royalties and taxable gains from selling a business or its assets would remain taxable. Corporate income tax and gross receipts tax would remain.
Reasonable, documented compensation for an owner's actual work would qualify for personal-income relief under rules that still require legislation and fiscal analysis. Ownership alone would not make business profits tax-free.
Reasonable, documented compensation for an owner's actual work would qualify for personal-income relief under rules that still require legislation and fiscal analysis. Ownership alone would not make business profits tax-free.
Advance Only When the State Can Afford It
Every step would require enough ongoing revenue after the reduction, adequate reserves, funding for annual obligations and a review of downturn risks.
The proposal would not finance permanent tax cuts by raising other taxes, using reserves or one-time balances, or making extraordinary permanent-fund withdrawals or increasing distributions. Speculative growth and unidentified savings would not count as financing.
The state's official revenue forecast would provide the baseline. The costs of the proposal would be shown separately.
The proposal would not finance permanent tax cuts by raising other taxes, using reserves or one-time balances, or making extraordinary permanent-fund withdrawals or increasing distributions. Speculative growth and unidentified savings would not count as financing.
The state's official revenue forecast would provide the baseline. The costs of the proposal would be shown separately.
Four Years Is the Goal. Every Step Has Conditions.
Gregg will work with the Legislature to deliver tax relief New Mexico can sustain. Four years is the goal. The full costs and timing still need to be worked out, and every step must protect funding for classrooms, healthcare, public safety and eligible refundable benefits.
If the state cannot meet those requirements, the next reduction waits. Earlier tax relief would remain in place under the proposal.
If the full plan does not pass through the legislature, Gregg will pursue a narrower proposal to end the remaining state income tax on Social Security benefits, pension & retirement pay and qualifying military retirement pay. That proposal would receive its own cost review and follow the same funding protections.
If the state cannot meet those requirements, the next reduction waits. Earlier tax relief would remain in place under the proposal.
If the full plan does not pass through the legislature, Gregg will pursue a narrower proposal to end the remaining state income tax on Social Security benefits, pension & retirement pay and qualifying military retirement pay. That proposal would receive its own cost review and follow the same funding protections.
Read the Proposal
Explore the proposed steps, household examples, safeguards and analysis still required before implementation.
