Colorado Could Swap a Flat Income Tax For Progressive Tax Brackets
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What the Initiative Does
Amendment 73 would change Colorado’s income tax system from a flat tax rate of 4.63% to a progressive income tax system with five brackets for individuals and families. The brackets would be as follows:
- $0 - $150,000: 4.63% (no change)
- $150,001 - $200,000: 5%
- $200,001 - $300,000: 6%
- $300,001 - $500,000: 7%
- $500,001 and above: 8.25%
This measure would raise the corporate income tax rate from 4.63% to 6%. It’d also decrease the property taxes school districts levy from 7.2% to 7% for residential property and from 29% to 24% for residential property.
Finally, this measure would establish a fund called the Quality Public Education Fund to fund preschool through 12th-grade public education. The fund would be used to increase the statewide base per-pupil funding and increase spending on special education, preschool, English language proficiency, and gifted programs.
In Favor
Colorado schools are severely underfunded, and this change to the state’s tax structure would raise funds to hire more staff, restore the five-day school week, and buy needed classroom supplies.
Opposed
Colorado’s schools are achieving good results on their current spending, ranking #10 in the nation overall. Raising taxes on workers and corporations will only raise the cost of living and doing business in Colorado without guaranteeing that educational outcomes will improve in the state.
In-Depth
Great Schools Thriving Communities, also known as “Yes on Amendment 73,” is leading the campaign in support of Amendment 73 with the support of the Colorado AFL-CIO, League of Women Voters, NAACP, Taxpayers for Public Education, Great Education Colorado, and others. Susan Meek, communications director for Great Education Colorado, says:
“This initiative is the one thing that can actually raise revenue substantially, sustainable revenue for our teachers. It actually takes someone to have about $182,000 in income before they’re going to have any kind of impact. Ninety-two percent of Coloradans would see no impact on their income taxes… The group of organizations that worked together to develop this policy thought it important that we not only raise revenue for schools, but that revenue also needed to be sustainable. We also wanted to make sure there is taxpayer equity, meaning those farmers and ranchers and landowners who have been footing a large portion of the property taxes with their non-residential assessment rates, would see some tax relief as well. It's not going to just help education but also rural communities that could really benefit from some of these tax policy changes… We have education supporters having conversations around the state about what additional revenue could mean for them. The money will be spent locally. Every school district can go out and say what it would mean for them. Perhaps it is vocational-technical education. Perhaps it’s having school five days a week. Perhaps it is having a counselor in every school.”
No on 73, also called “Blank Check, Blatant Deception, Vote No on 73,” is leading the campaign against Amendment 73 with the support of Americans for Prosperity, the Colorado Restaurant Association, The Independence Institute, Colorado Farm Bureau, and others. The No on 73 campaign argues that:
“73 is a massive tax hike on many Colorado families and most Colorado employers designed to give education bureaucrats a blank check. Amendment 73 guarantees no results. It is a blank check. Amendment 73 proponents are employing a campaign of deceit to try and seduce Colorado voters into backing their plan. Don’t be deceived!”
The Denver Chamber of Commerce adds that Amendment 73 puts too much pressure on small businesses, and doesn’t do enough to improve educational outcomes:
“As a Chamber, we strongly support a well-funded and effective PreK-12 system; however, this proposal raises multiple concerns for our members because it places the burden of funding education on the backs of our smallest businesses, threatening their ability to succeed, and locks that burden into our state’s constitution. This measure also doesn’t propose to deliver better results or outcomes in terms of educational achievement for Colorado. We believe it’s fair for taxpayers to expect improvements like higher graduation rates or lower remediation rates in college with significantly increased funding. With almost three out of four jobs in Colorado now requiring a postsecondary credential, we think education funding should include funding for both PreK-12 and higher education to ensure families and students can work in Colorado.”
This tax rate change would raise an additional $1.6 billion in revenue for Colorado.
Currently, Colorado spends $9.733 per pupil. The national average as of June 2018 was $12,526. In July 2018, WalletHub’s “States with the Best & Worst School Systems” ranked Colorado #10 overall, #14 in quality, #8 in safety, and #27 in spending, designating the state as “low spending and a strong school system.” Since the 2008 recession, state lawmakers have withheld $7.4 billion from schools to shore up other parts of the budget, leaving many school districts operating at 2008 funding levels and causing half of the state’s school districts to cut back to a four day school week.
This measure qualified for the ballot with the submission of 130,022 valid signatures. For a measure to make it onto the ballot in Colorado, 5% of the total number of votes cast for the office of Colorado Secretary of State are needed. For the November 2018 election, that number is 98,492.
Summary by Lorelei Yang
(Photo Credit: iStockphoto.com / alfexe)
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