Political Sheet

Colorado Income Tax Rate Fight Gives Voters Two Opposite Choices

1 hour ago
by Scott K. James
4 min read
Editorial illustration of a Colorado tax-policy fork in the road near the Capitol and Front Range
Two tax roads. One voter decision.
Written by Scott K. James

Colorado voters could weigh a graduated income tax against a 4.40 percent statutory cap, with both measures leaving room for future lawmakers.

Colorado voters could face a rare political fork in the road this November: two ballot measures giving precisely opposite answers to the same question. Should state government be allowed to take a larger percentage of some Coloradans’ income, or should the current 4.40 percent rate become the statutory ceiling?

Rocky Mountain Voice reports that Initiative 195 would replace Colorado’s flat income tax with six graduated brackets, cutting rates on lower taxable income while raising marginal rates above $500,000. Supporters project the change would generate close to $2 billion in additional annual revenue. Initiative 232 would head the other direction, prohibiting individual and corporate income-tax rates from rising above 4.40 percent beginning in 2027. (rockymountainvoice.com)

So much for easing voters into the conversation. Colorado may skip the appetizer and go directly to the political knife fight: one campaign promising fairness through more taxation, the other promising protection by locking the rate in place.

The Bullet Point Brief

  • Initiative 195 replaces the flat tax with six brackets. Taxable income would begin at 3.7 percent, rise through several levels, and reach 8.4 percent on income above $1 million. Apparently, nothing says “simplification” like replacing one number with a staircase.
  • Initiative 232 caps the rate at 4.40 percent. Tax cuts would remain possible, but increases would be prohibited by statute. That is less a tax policy than a padlock, although Colorado legislators have demonstrated impressive creativity around padlocks.
  • The graduated-tax proposal also exempts the new revenue from TABOR’s revenue cap. The money would flow into the Colorado Future’s Account rather than potentially being returned as surplus revenue. Government has always had a gift for giving money a hopeful name immediately after removing it from someone’s paycheck.
  • The fight over who pays more is not limited to yacht owners and cartoon billionaires. Pass-through income from contractors, medical practices, manufacturers and family businesses can appear on personal tax returns, potentially pushing owners into the higher brackets. The line between “wealthy taxpayer” and “local employer with trucks, payroll and ulcers” can get blurry fast.
  • Both measures contain statutory language that future legislatures could amend. Initiative 195 would constitutionally remove the single-rate requirement, but its brackets and TABOR exemption would remain in statute. Initiative 232 is entirely statutory. Voters may be asked to settle the argument, only to discover that lawmakers kept an eraser nearby. (rockymountainvoice.com)

My Bottom Line

This is not merely an argument over brackets, thresholds and decimal points. It is a referendum on who controls the next dollar earned in Colorado. One side believes state government needs a larger claim on higher incomes to address budget demands. The other believes voters should close the gate before another tax increase comes trotting through wearing a “fairness” sash.

Supporters of Initiative 195 say 97 percent of Coloradans would pay less. That is the compassionate-sounding pitch, and voters should inspect every bolt holding it together. Tax campaigns rarely begin with, “We would like more of your money because we have become accustomed to spending it.” They arrive wrapped in promises that somebody else will pay, services will bloom and no ordinary household will feel a thing.

Opponents face questions too. A statutory cap is only as durable as the political majority willing to preserve it. Calling something a permanent safeguard does not make it permanent when a future legislature can reach it with an ordinary bill and sufficient votes. Both campaigns will sell certainty, but the article makes clear that much of what voters approve could later be rewritten at the Capitol.

Colorado families already encounter the state’s cost of living every time they buy groceries, pay rent, fill a tank or open a property-tax notice. That makes this choice real at every payday. Before surrendering more income or accepting promises of an ironclad cap, voters deserve plain language about who pays, who benefits, what lawmakers can later change and how much government will collect. No incense, no tax-policy priesthood and no heroic slogans. Just the numbers, the consequences and an honest accounting of whose wallet is being volunteered.

Source: Rocky Mountain Voice

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