Effort to repeal Social Security tax gains momentum in New Mexico
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ROSWELL, N.M. — New Mexico’s tax on Social Security income could soon disappear based on the support in Santa Fe this legislative session.
On Tuesday, in her State of the State address, Gov. Michelle Lujan Grisham publicly announced that she backs scrapping the tax.
“We must unburden the New Mexicans who rely on Social Security benefits by cutting their taxes,” Lujan Grisham said.
New Mexico is one of twelve states that tax the benefits Social Security recipients receive.
According to an analysis last year by New Mexico Legislative Finance Committee, individual benefits of more than $25,000 and those of more than $32,000 for married couples who file jointly, are subject to the state’s income tax.
State Rep. Cathrynn Brown, R-Carlsbad, a proponent of eliminating the tax, said she hopes the governor’s public backing of such legislation, will make its passage a reality.
“I hope that the governor’s recent words o of support will translate into the bill becoming law,” Brown said in an interview with KOB 4 Friday.
Brown is the sponsor of House Bill 48, which would end New Mexico’s tax on Social Security benefits effective July 1. She is also a sponsor of Senate Bill 108, which is the Senate version of HB 48, and backed by Lujan Grisham.
With the state now receiving a flood of federal money and experiencing a budget surplus, Brown said now is an ideal time to abolish the tax.
“The state is flush with cash right now. More than we have ever had. And so if there is any time that is right to do this, it’s now.”
Those who want to end the tax, like Brown, say it amounts to double taxation for Social Security recipients and that is unfair.
“They (retirees) were already taxed once when that income was taken and put into the Social Security account. And then New Mexico taxes them when they take it out so it is taxed twice,” Brown said.
Abolishing the tax, she claims, would encourage more retirees to consider moving to or remaining in New Mexico, and would help retirees on fixed income.
Critics though, such as New Mexico Voices For Children, a children’s advocacy group, worry about the price tag of fully repealing the tax.
They said in literature last year on their website that exemptions already exist for low-income New Mexicans and that the tax will mainly benefit wealthier retirees. But Brown says that should not matter.
“Bottom line is it is their money. They invested it in their retirement through their working years. And who is the Legislature to say you can only have so much income before we start taxing it,” she said.