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<freedom>Many U.S. governors insist that taxes cannot be cut because government programs and spending levels must be maintained. America's tax-cutting governors, by contrast, are a select group of leaders that have moved to lower tax rates on income and capital investment in states from New Mexico to South Carolina to Montana. This latter group has found that one of the best ways for state governments to maintain spending is by cutting tax rates to levels that will attract business — and thus more tax revenue.<fries>

<supply> New Mexico's Democratic Gov. Bill Richardson made this argument in his first (2003) address to the state legislature: “We will bring New Mexico's top personal income tax rate down to five percent in four years. After all, Texas and Nevada have no personal income tax at all. Arizona and Colorado already top out in the five percent range.”

The Democratic-controlled legislature heard Richardson's call and reduced New Mexico's top income-tax rate from 8.2 to 4.9 percent over five years. They also agreed to cut the state capital-gains tax.

Richardson said, “I am convinced that by making New Mexico a more tax-friendly place for growth-oriented businesses and entrepreneurs, the cut in rate[s] will be more than compensated for by the increase in taxpayers — and income — in that bracket.” He was right. Summer 2005 revenue estimates for New Mexico show the state will receive an additional $216 million this fiscal year, including higher personal income-tax revenues.<side>

<cool> The supply-side formula is succinct: Tax something less, get more of it. Want more tax-paying businesses in your backyard? Tax those businesses less. <ranch>
Even democrats are doing it.


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