Bill to Reduce Income Inequality Moves to House Floor
Rep. Ely’s Bill Creates A New Tax Bracket for Top Earners & Addresses Inequities in New Mexico’s Tax System
Santa Fe, NM – A bill to address New Mexico's income inequality and taxation inequities passed the House Taxation and Revenue Committee today by a party-line vote of 7 to 6. House Bill 201 creates a new top income tax bracket for the state's wealthiest earners.
“Today we took another big step forward toward creating true fairness among our economic classes here in New Mexico,” said Rep. Damon Ely (D-Corrales). “House Bill 201 is asking those people who make at least $230,000 per year to pay approximately 1% more in personal income tax. Under the current system, those who make $230,000 pay the same tax rate as those who make $16,000. That is not who we are as New Mexicans.”
Income inequality is worse in New Mexico than in 38 other states. The top 5% income earners have fifteen times the average income of the lowest 20%. New Mexico has the second-highest poverty rate in the country. HB 201 not only addresses some of these taxation inequities, but will also bring increased revenue to our state.
“The additional revenue raised by this proposal will help add additional funding for our schools and ensure that no further cuts are made to our emergency services,” said Rep. Ely.
The new top income tax bracket for tax years after January 1, 2018 would be 5.9% applying to: income over $230,000 for married individuals filing separately, income over $460,000 for heads of households, surviving spouses, and married individuals filing jointly, income over $306,667 for single individuals and for estates and trust.
The new tax bracket would affect only 1,721 households or 0.083% of New Mexicans, according to the Taxation and Revenue Department.
House Bill 201 now moves to the House Floor.