One state senator on Wednesday is proposing a tax overhaul bill whose provisions, he says, could be the cure-all for the state’s budget crisis.
Sen. William Sharer (R-Farmington) would cut out most taxes state and local taxes and replace them with a flat two-percent tax on things people buy.
Sharer says studies show such a flat tax would generate enough revenue to pay for all state and local government functions and “it could raise even more revenue than the current tax system.”
“We have control over how we are taxed by how much we buy,” Sharer said. “We have control over this tax.”
Currently, the gross receipts tax rate varies throughout the state from 5.125% to 8.88% All gross receipts taxes would be reduced to two percent under the overhaul plan. More than 400 state statutes would eliminated by the bill.
“Today’s tax system personifies the worst of the worst,” Sharer said. “It’s time for dramatic change. Our current tax system is burdensome, unfair; nearly impossible for the average taxpayer to understand, huge, and complicated. In short, it’s a real mess. This reform is pure and simple.”
If SB123 were to be passed into law, there would be:
- No corporate income tax
- No estate tax
- No compensating tax (what pay when buying out of state)
- No vehicle excise tax
- No insurance tax
- About 100 other special taxes would be eliminated – leased vehicles, boats, etc
- No deductions
- No credits
- No exemptions
- Only a two-percent gross-receipts tax (one percent would go to the state, one half to cities, one half to counties.)
- Only a two-percent compensating tax
- Internet sales would be included in this tax plan
“We built in two triggers, since we don’t want to take even a dime more from our taxpayers than really necessary,” Sharer said.
Those triggers include:
- Excess revenue generated will help address our crumbling infrastructure, roads and bridges, making the Land of Enchantment safer for all of us.
- After the infrastructure is repaired, we’ll lower the tax rate to put even more money in the pocket of the people.
“Remember, our tax system must be fair and raise only the amount of revenue we need to serve our citizens and grow our economy,” Sharer said. “It needs to be easy for the average citizen to understand. The new reform does just that.”