HomeBudget & Tax NewsColorado Conservatives Prevail in Tax Hike Battle

Colorado Conservatives Prevail in Tax Hike Battle

A Colorado ballot initiative to make the state’s income tax progressive failed to garner enough signatures to be included on the ballot in the upcoming November elections.

Initiative 271 would have established a progressive state income tax under which higher-income earners would pay a greater percentage of their income than those with lower incomes.

Currently, Colorado assesses a 4.63 percent income tax for all residents, regardless of their income level. Initiative 271 would have increased the rate on those making $250,000 to $500,000 per year to 7 percent and reduced the rate on taxpayers under $250,000 annual income to 4.58 percent. Those with incomes between $500,000 and $1 million would have paid 7.75 percent, and those with incomes over $1 million would have paid 8.9 percent.

The tax increase on higher-earning Coloradans would have generated an estimated $2 billion for state coffers, with $1.3 billion planned for a paid family medical leave policy and the rest going to gvernment schools.

There is other good news for tax-sensitive Colorado residents, writes Patrick Gleason in Forbes. While the tax increase failed to make the ballot, Coloradans will have a chance to vote on two other initiatives that would hold taxes down. Initiative 306 would reduce the current, flat income tax rate, and Initiative 295 would stop “stealth tax hikes” the legislature imposes through the fee implementation and adjustment process.

Initiative 295 would correct the current process through which the Colorado legislature has been able to avoid obtaining taxpayer approval for increases in revenue by referring to them as fees instead taxes. By designating the levies as fees, the legislature can circumvent the Colorado Taxpayers Bill of Rights in the state constitution, which requires a vote by the state’s residents before any tax can be increased.

Under this initiative, Colorado residents would have the ability to vote on fees, just as they can vote on taxes. This would effectively close the loop on the legislature’s ability to increase taxes without going to a vote, writes Gleason.

Coloradans have historically voted against tax increases, but the legislature continues to find loopholes to extract more money from residents’ pockets through fees, Gleason notes. Initiative 295 would require that the fee system be aligned with the taxation process and would create consistency in revenue increases, regardless of the terminology.

Initiative 306 would reduce the state’s income tax from the current 4.63 percent to 4.55 percent, easing the burden on all taxpayers. Both initiatives are supported by the Independence Institute, a Colorado think tank, and many business owners. The tax reduction would provide necessary relief to business owners, individuals, and families, Gleason notes.

It is unlikely that either of these two initiatives will garner support from Democrats in the state legislature, but Gov. Jared Polis, a Democrat, reportedly may support them. “I believe in science,” Gleason quotes Polis as having written in a column published on New Year’s Eve. “The world is not flat; vaccinations work; and a broader base taxed at a lower rate leads to greater economic growth with the ancillary benefit of preventing the corrosive influence of crony capitalism.”

Coloradans who support a tax hike on high earners do not intend to give up, reports Saja Hindi in the Denver Post. Citing the pandemic as a hurdle that made signature collection more difficult, even though other initiatives did make the ballot, Scott Wasserman of the Bell Policy Center told the Post his group will be back again.

“Coloradans clearly don’t want a tax hike. Period,” the executive director of the conservative advocacy group Colorado Rising State Action, Michael Fields, said in a statement.

 

Eileen Griffin
Eileen Griffin
Eileen Griffin writes from Richland, Washington.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisment -spot_img

Heartland's Flagship Podcast

Read this report

PROOF Trump's Tax Cuts Workedspot_img
- Advertisment -spot_img

Most Popular

- Advertisement -spot_img

Recent Comments