How could Colorado's tax changes affect New Mexico's business competitiveness?
Colorado's tax hike may boost New Mexico's relative business appeal If Colorado passes Amendment 87, its top income-tax rate would nearly double from 4.4% to 8.4%, placing it at the ninth-highest state income-tax rate in the country. This increase would make Colorado less competitive against states that offer lower tax burdens. Since New Mexico has a flat rate of 5.9%, Colorado's move could improve New Mexico's relative attractiveness for businesses, investment, and talent compared to its neighbor.
- Effect
- Mild positive
- How direct
- Stated in the reporting
- When
- Within weeks
- The story
- Still developing
How it reaches New Mexico
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Amendment 87 would nearly double Colorado’s top income tax rate, increasing it from 4.4% to 8.4%. This would position Colorado with the highest top-bracket rate in its region. The measure would remove nearly $2.7 billion from Colorado’s private economy annually.
The full event1independent outlet -
Amendment 87 would raise Colorado’s top income-tax rate to 8.4%, making it significantly less competitive compared to states like Arizona (2.5% flat rate) or those with no income tax. This relative decline could make New Mexico, which has a 5.9% flat rate, a more attractive option for businesses.
1 report connects these two. Brind only summarizes; follow a link to read the reporting itself.
- gazette.com Yesterday
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state of the United States of America
Everything about New Mexico
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The facts so far
As reported. Each one links to where it comes from.
- Amendment 87 would nearly double Colorado’s top income-tax rate, from 4.4% to 8.4%.gazette.com
- New Mexico’s flat rate is 5.9%.gazette.com
- Nine in 10 Colorado executives said Amendment 87 would somewhat or significantly worsen Colorado’s outlook on economic competitiveness.gazette.com
Why it matters
For New Mexico, which is actively competing with Colorado for businesses and talent, a significant tax increase in a neighboring state could provide a relative advantage. This is critical because businesses and skilled workers are highly mobile, and tax policy is a key factor in their decisions about where to live and operate.
The national trend shows a movement away from graduated tax structures, with 30 states having cut their top income-tax rates over the past half-century. Colorado's proposed move would place it alongside states like California, New York, and New Jersey, potentially putting it at a growing disadvantage compared to its competitors.
What we don't know yet
- How will businesses currently operating in Colorado react to the potential tax increase?
- Will New Mexico see a measurable increase in business migration or investment as a result of Colorado's policy changes?
What would change this answer
— Other considerations
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Reporting
- gazette.comYesterday
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