Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance committees of the NM Legislature. The LFC does not assume responsibility for the accuracy of these reports if they are used for other purposes.

Current FIRs (in HTML & Adobe PDF formats) are available on the NM Legislative Website (legis.state.nm.us). Adobe PDF versions include all attachments, whereas HTML versions may not. Previously issued FIRs and attachments may also be obtained from the LFC in Suite 101 of the State Capitol Building North.

F I S C A L I M P A C T R E P O R T

SPONSOR	Foley		DATE TYPED	2/6/04		HB	HJM 57
SHORT TITLE		Support Permanent Federal Tax Cuts				SB
					ANALYST		Collard

APPROPRIATION

Appropriation Contained		Estimated Additional Impact		Recurring or Non-Rec	Fund Affected
FY04	FY05	FY04	FY05
			See Narrative

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Taxation and Revenue Department

SUMMARY

Synopsis of Bill

House Joint Memorial 57 states that recent federal tax cuts reduced taxes for all taxpayers, eliminated the marriage penalty and “death tax”, increased the child credit rebate and business expensing, expanded individual retirement accounts and cut double taxation of capital gains.

The memorial further states that economic growth stemming from the latest tax cut accelerated at its fastest rate in 20 years recently. It states, however, that provisions of the cut are to expire between 2005 and 2012. As a result, the joint memorial indicates expiration of the cuts will increase taxes fifty percent for “lower-income” families, the marriage penalty will be reinstated, education savings will be taxed, retirement savings will shrink, and every taxpayer will face an income tax increase, thus producing the largest tax increase in American history, and stifle economic growth.

However, the memorial states that making the tax permanent will allow taxpayers to feel more confident when investing in “their child’s college” or savings for retirement, while ensuring increased economic growth. The memorial therefore requests that the New Mexico legislature ask the New Mexico congressional delegation to support making the president’s tax cuts permanent.

FISCAL IMPLICATIONS

There are no fiscal implications dealt with in this bill. However, there could be potential implications if the tax cuts are made permanent.

KBC/yr