Colorado Tax Credits Prove Families Spend Better Than Government

The Denver Post is out with a story that accidentally makes the best case for letting taxpayers keep more of their own money. In a piece by Nick Coltrain, the paper profiles Colorado’s family-oriented tax credits through the experience of one Denver mom, while lawmakers under the Gold Dome stare down a budget crunch that could shrink or suspend those credits.

The article centers on Bukola Arije, a 39-year-old bus driver for Denver Public Schools raising three kids. She describes last year’s mix of new and expanded tax credits as “light and hope,” not just for catching up on bills, but for surviving a major crisis when a car crashed into her home and displaced her family.

Coltrain also highlights a new study (backed by Denver-based Gary Community Ventures and led by researchers at Washington University and Appalachian State) that found three credits together lifted more than 52,000 Colorado children out of poverty and reduced childhood poverty by about 37%, while the politics now revolve around whether the state can afford to keep the credits going.

The Bullet Point Brief

• The credits at issue are the Family Affordability Tax Credit, an expanded state Earned Income Tax Credit, and the Colorado Child Tax Credit. Last year lawmakers directed about $1.3 billion into them.
• The study says the credits dropped Colorado’s child poverty rate to 7.3% from 11.6% before the credits, and it calls the impact unusually strong compared with other states.
• Arije’s real-world use of the money is the whole point: she says she claimed about $18,000 in combined state and federal credits, about $8,000 from the state credits, and it went to bills, overdue car repairs, healthier food, and a little breathing room.
• The catch: the state designed the expanded aid to shut off if the budget does not grow fast enough. The funding is tied to revenue above the TABOR cap, and the state is projected to fall under the cap this fiscal year, meaning no “excess” money and potentially no credit payments unless lawmakers shift dollars.
• Under the Gold Dome, even supporters are talking “trade-offs.” One senator says fully restoring the Family Affordability Tax Credit for the next cycle would cost about $800 million, while others openly debate what gets cut and whether voters should weigh in.

My Bottom Line

This story is what happens when policy accidentally stumbles into common sense. A tax credit is not some shiny new government “program” with a logo, a commission, and a downtown office full of people holding meetings about meetings. A tax credit is the state doing something rare: stepping back and leaving money in the hands of taxpayers.

And look what happens when you do that. A working mom uses it to catch up on bills, fix the car so she can keep working, buy better food, and build a sliver of stability. Then life hits like a truck, in her case literally a car into her home, and that same money becomes a lifeline instead of a press release.

But government is a beast. It is never satisfied leaving money with the people who earned it. So now, in the name of “budget pressures,” lawmakers start eyeing tax credits as the first piggy bank to smash so they can feed the machine. The article practically telegraphs the next move: shrink the credit, suspend it, “tweak” it, and funnel dollars somewhere else where taxpayers will never see the money again.

Here’s the right trade-off: cut the inefficient government program, not the tax credit. If you truly care about families, stop herding money into systems that chew it up in overhead and politics. Let taxpayers keep more of what they make. They will do more good with it than the state ever will, and this story is your receipt.

Source: The Denver Post