It’s Time to Limit This Unfair Tax Giveaway - THE PROBLEM

CapitalGains2023 It’s Time to Limit This Unfair Tax Giveaway THE CAPITAL GAINS DEDUCTION REDUCES NEW MEXICO’S ABILITY TO PLAN FOR AN EQUITABLE FUTURE Support HB 37 Repealing - or significantly limiting - the capital gains tax deduction will help build a more equitable tax system – one that doesn’t favor wealth over work – all while generating sustainable revenue for the state. [...] THE PROBLEM • New Mexico is one of only nine states that gives a big, unnecessary tax break to those with capital gains income, which is the income an investor gets when selling an asset – such as shares of stock, real estate, or artwork – at a profit. [...] WHO GETS THIS TAX BREAK? INCOME INEQUALITY Most capital gains income goes to New Mexicans earning $100,000+ • 91% of the value of the capital gains deduction goes to just 14% of New Mexicans – those who 9% 86% earn more than $100,000. [...] • 91% of goes Capital gains income is generated capital gains income to the wealthiest by wealth, and because 87% of the wealth in this nation is held by white 14% households, this deduction is part Capital gains income in New Mexico tax filers of the system that furthers income New Mexico by income group by income group and wealth disparities along racial and ethnic lines. [...] How this Impacts Racial Equity Eliminating or limiting the capital gains deduction would advance racial equity in New Mexico because capital gains income is generated by wealth – the vast majority of which is held by white households.