JON CALDERA: The Colorado legislature snatched your Trump tax cut.
Your Colorado income tax is based solely on your “taxable income” from your federal 1040 form. For your Colorado state income tax form you take your federal taxable income and multiply by our flat income tax rate, 4.63 percent.
But, for most folks, that federal taxable income actually goes up because there are now fewer allowed itemized deductions. For instance, you can only deduct so much interest from a home loan. This larger taxable income isn’t an issue because the new income tax rates are so much lower, your overall federal tax bill goes down.
But when you use that same, now larger, federal taxable income number for your state taxes, your state tax bill goes up because, wait for it, the Colorado state legislature didn’t lower the state tax rate to adjust for the new Trump Bump. A bill to do so passed out of last year’s Republican controlled Senate to, of course, die in the Democrat controlled House.
So, this year you get to pay for yet another tax increase you didn’t get to vote for.
Fortunately, there is a safety valve in our Taxpayer’s Bill of Rights (TABOR) to make sure excess revenue, like that coming from the Trump Bump, goes back to you the taxpayer in a refund. When the state takes in more revenue than what it did the previous year, plus inflation and population growth, it has to refund that money back to you.
So, the Trump Bump should still be refunded back to you. But, wait for it, it won’t.
Because Democrats.
And do read the whole thing.