[Aloisius]

Can they convert $1K outlay into $1.1K of tax revenue the same month?

Given New Mexico's tax rates, it seems like it would be difficult to do so.

It looks like the program will cost about $600M next year. In order to generate more tax revenue than it costs, it would need to increase personal income somewhere on the order of $12-15B of personal income, taxable sales, business profit or some combination.

Now, a fraction of that will come from the childcare workers. Some may come from stay-at-home parents or parents working part time going to work, but given they say it'll save on the order of $12K/year/family, a family would need to increase their income by about $260K/year in order to pay $12K in extra state income taxes.

It's rare to see spending programs actually pay for themselves. Mostly when politicians talk about a program paying for itself, they preform verbal slight-of-hand, arguing that $x will come back as $x*y in economic activity. That is, of course, a lie, but no one calls them out the fact that economic activity ≠ taxes.

[Retric]

It doesn’t matter if New Mexico’s state government recuperates its revenue it matters if New Mexico’s citizens are better off. As such federal, state, and local levels are worth considering not just state taxes, including changes in other outlays such as healthcare subsidies. Effective tax rates on marginal income often exceed 50% for American families even ignoring the income stream from daycare workers and facilities etc. US Government spending being 40.5% of GDP those kinds of marginal tax rates should be expected.

Now as a low population state implementing this at the state level means most of that federal savings/revenue helps people outside of the state, but that’s the issue with implementing such programs at the state level rather than an issue with the type of program itself.