For example, the children we educated just a generation or two ago are the workforce of today just as the children we educate today will be the workforce of tomorrow. In reverse, many of the investments we make today will still be benefitting New Mexicans in years to come. For example, many of the roads, water lines, and schools that we use today are the result of investments we made with tax revenue in the past. Just as our tax revenue allows us to prepare for the future, we also continue to rely on tax revenue that was spent in the past. We also use our tax revenue to anticipate and prevent future problems that we know will affect the well-being of our state. We use tax revenue to meet our current needs – such as educating our children and maintaining our highways – and solve our problems – such as poverty, drug addiction, and crime. If we think about our state budget as the blueprint for the New Mexico we wish to create, we can think of our taxes as the way we make those plans a reality. This includes helping provide the programs, services, and infrastructure – such as education, public health and safety, and roads and bridges – that make our economy possible and that we all depend upon. Our state tax revenue is what allows us to accomplish things that benefit us collectively. WFTC – Working Families Tax Credit Why Taxes Matter Acronyms used in this guide are written out in the box below. Words that appear in boldface are defined in the Technical Terms and Tax Facts boxes. They look at the basics of the state’s general fund budget, the budget formation process, and how citizens can promote their priorities within that process. While this guide describes the basics of New Mexico’s tax system, two companion publications – A Guide to New Mexico’s State Budget and An Advocate’s Guide to New Mexico’s Budget – explain how those taxes are spent. We’ll follow up with a quick overview of the various sources of state revenue (there’s more than one), then delve into the principals of a good tax system and what constitutes “fairness” in taxation. We’ll start this guide with a brief look at why our state tax system is important. Do not despair! This guide seeks to bring the basics of the state’s tax system into focus for you. What’s more, tax systems are inherently complex. Although we must collect tax revenue in order to accomplish our collective goals, taxes have long had a bad rap. ![]() These lawmakers also determine how tax money is collected – how much we all pay in taxes, what we’re taxed on, and when. ![]() Elected officials decide how to spend tax revenue through the annual budgeting process. Link to A Guide to Legislative Advocacy in New Mexico IntroductionĪlmost every dollar that the state of New Mexico spends – whether to pay teacher salaries, purchase asphalt to build roads, or fill up the gas tank in a state trooper’s vehicle – is raised through tax collection. Link to An Advocate’s Guide to New Mexico’s Budget Link to the full Guide to New Mexico’s State Budget Link to the Guide to New Mexico’s State Budget executive summary ![]() Link to an updated version of “The Backward State of Taxes” graphic (from page 11 of the pdf) How the State Collects Money and Why it Mattersĭownload this tax guide (updated March 2021 16 pages pdf)
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