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The Greater Albuquerque Chamber of Commerce (GACC) proposed last month that New Mexico reimpose the tax on food. The food tax issue has not gone away, but a wiser strategy would be a targeted tax on junk food, rather than making necessities like fruits, vegetables and baby food more expensive for New Mexico families.
Governor Richardson and the Legislature thankfully abolished the food tax beginning in 2005. The tax had been enacted in 1933, as part of a “temporary” and “emergency” measure. But the food tax long outlasted the emergency of the Great Depression. In fact, between 1933 and 2005, it more than doubled from its original rate of 2.5 percent.
In 1958, 41 states taxed food. Since then, however, the states have moved steadily toward exempting food from tax. By the time New Mexico repealed its food tax, only seven states still fully taxed the sale of groceries.
Today, that number has dwindled to only two: Alabama and Mississippi.
The trend toward repealing the tax on food has been accelerated in part by the recognition that the food tax is a weak foundation on which to base essential government services. This is because food tax revenue grows so much more slowly than state and local government spending.
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