DISPATCHES FROM BLUE COLORADO: Expect a special interest stampede if ‘progressive’ tax passes.
You can predict some of the damage from Initiative 181 just by reading its miserably-written text:
It would amend the state constitution to strip away the protection of the single flat rate.
With constitutional protection gone, it would re-write the tax code to make it more complicated, replacing the single bracket with ten new ones—five for individuals and five for corporations.
The individual income tax brackets would range from 4.21% to 9.51%—far above that of any other state in the region and one of the steepest in the entire country. Moreover, there does not seem to be any protection from “bracket creep,” the insidious process whereby people’s tax rates rise relentlessly merely because they have kept up with inflation. Year after year, you would find yourself paying more and more of your income to the state.
On the corporate side, Initiative 181 would jack up the marginal rate to 9.51%, the nation’s third highest. This is higher than corporate taxes in lefty states such as New York, Massachusetts, and California. What’s more, this burden would be imposed on even relatively small corporations—those earning more than $1 million a year.
Initiative 181 would abolish your TABOR [Taxpayers’ Bill of Rights] tax refunds for any additional money generated.
It would send the extra funds to various social programs, most of which have a record of waste and corruption. Not a single dime would be spent to counter Colorado’s crime wave, retire our excessive debt, or repair our crumbling roads!
But there’s more than the text of this measure reveals. As I pointed out in a previous column, punitive (“progressive”) state income taxes have a documented record of discouraging investment and killing jobs. This is particularly so when a state hikes levies while other states are cutting them, as is happening now.
Colorado Democrats hate TABOR and have been chipping away at it for years, because the 1992 constitutional amendment limits state and local government revenue growth to inflation plus population increases, requires voter approval for tax hikes or debt, and mandates refunds of any excess revenue to taxpayers.
181 would gut the last obstacle separating Democrats and the total Californication of a once-great state.