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Editors Note banner

Gross and Grosser

Two habits New Mexico needs to kick: Over-reliance on the gross receipts tax. . . and allowing cockfighting.

 

Grant County residents woke up in the new year to what was for many an unpleasant surprise: The gross receipts tax had jumped by one-eighth of a percent.

The increase caught many shoppers and even retailers unawares, because county commissioners sneaked it through last year with little fanfare and still less opportunity for public discussion. The boost, targeted to help foot the bill for a new jail, brings the tax in Silver City to 7.25 percent.

But Grant County commissioners aren't the only officials who view the gross receipts tax as the fiscal equivalent of the fairy tale of the bottomless milk pitcher. Dona Ana County commissioners are expected to vote early this month to put a one-quarter of one percent increase on the ballot April 3. The funds would go toward the proposed Spaceport America in Upham; Sierra and Otero county officials say they plan to schedule similar referendums. The dubious merits of the spaceport project aside (see our complete report in the February 2006 issue), it's eyebrow-raising enough to think that the gross receipts tax in Las Cruces would jump to 7.375 percent.

Despite recent reforms lifting the gross receipts tax from groceries and medical services, the tax remains inherently regressive. It still applies to clothing and most other everyday necessities, from toothpaste to furniture, and bears no relationship to a person's income or wealth. As a state with one of the nation's highest poverty rates, where roughly a quarter of the children live in households below the poverty line, New Mexico's continued heavy reliance on such a regressive tax is unconscionable.

Moreover, because it's not a true sales tax, New Mexico's gross receipts tax also applies to services and to many basic costs of doing business. The resulting "pyramiding" amounts to a tax on taxes a business has already paid once: When Bob's Widget Co. spends $1 million on raw materials, supplies and even accounting services in New Mexico, it pays another $70,000 or more in gross receipts taxes. If Bob wants to stay in business, he will pass that $70,000-plus on to customers in the price of widgets. But when those widgets are sold in New Mexico, purchasers pay gross receipts taxes as well on the sliver of the price representing the taxes Bob has already paid. It's estimated that the impact of pyramiding on the New Mexico economy runs as high as $750 million annually.

And officials wonder why it's hard to attract businesses to New Mexico.

It's amazing that even bureaucrats could somehow devise a tax that manages to burden both the poor and businesses alike. But because it seems more painless than it really is–nickel- and dime-ing New Mexicans to death–the gross receipts tax fails to arouse the ire from either the left or the right that it deserves. City and county officials can sneak in an eighth of a percent increase here, a quarter-point there, without sparking the protests that a hike in property taxes would engender.

But how high can the gross receipts tax go? Eight percent? Ten percent? Twenty? At some point, New Mexico taxpayers need to wake up and smell the coffee–which, when poured at your corner coffeeshop, is also subject to the pernicious, regressive and job-killing gross receipts tax.

 

On a brighter note, Gov. Bill Richardson has finally joined the chorus–which has long included two-thirds of New Mexico voters–calling for a ban on the barbaric "sport" of cockfighting. His timing couldn't make his motivation any more transparent: Safely re-elected by a landslide, the governor knows it would now be awkward to run for his next job–at the White House–from one of only two states that still allows cockfighting. Let Louisiana go solo on that dubious honor, he figures–less explaining to do in New Hampshire and Iowa.

Better late than never, nonetheless, governor. If anybody else has lingering doubts about cockfighting, go reread Jeff Berg's investigative report, "Crying Fowl," in our March 2005 issue, along with Matt Retherford's accompanying account of his own brief career in cockfighting; both stories are available on our Web site (Cockfighting, Cockfighting career).

Arguments that cockfighting is somehow part of New Mexico's heritage, that it represents "culture" rather than mere cruelty, are beside the point. Human sacrifice has been part of some people's culture, too, but that doesn't make it right. European culture once sanctioned the burning and drowning of innocent women as witches; somehow we managed to outgrow that. If your so-called "culture" is incapable of seeing that torturing animals for sport is simply wrong, the problem lies with your "culture," not with those trying to protect the objects of your cruelty.

Concerns that banning cockfighting represents a slippery slope to banning rodeo, hunting or fishing, as voiced by Sen. Phil Griego of San Jose, are even more ludicrous. Look at the 48 other states that have already banned cockfighting: Have any of them likewise outlawed, say, trout fishing? Of course not.

The fact is, cockfighting is not about the roosters the way that angling is about the fish. Cockfighting exists as an excuse to gamble. The spectators could just as well be betting on Rock-Em-Sock-Em Robots.

Maybe Gov. Richardson's clout this legislative session will at last leave Louisiana as the only state still perpetuating this travesty. But we shouldn't take success for granted: Legislators need to hear from those who want a ban, since they'll certainly hear from the pro-cockfighting crowd. Among local legislators, Sen. Mary Jane Garcia of Dona Ana County is to be commended for her consistent leadership in the battle to ban cockfighting. But let's not forget that Grant County's powerful Sen. Ben Altamirano was among those who voted to table a proposed ban in the 2005 session. He needs to hear from his constituents this session–loudly. And if Sen. Altamirano again sides with the forces of cruelty, he needs to be held accountable at the ballot box.

Gov. Richardson has seen the light. Let's make sure that our state legislators see it, too, and lead New Mexico out of the darkness of allowing torture in the name of sport.

David A. Fryxell is editor of Desert Exposure.

 

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