A recent Colorado Sun article by Brian Eason makes incomplete claims about the Amendment 87 progressive income tax ballot question that could obscure the measure’s true impact on tax filers.
Voters deserve the full picture to make an informed decision.
While it is one of the first mainstream media articles to acknowledge that the new tax brackets in 87 would not be indexed to inflation, several of Eason’s claims still need to be addressed.
Misleading Tax Data
First, citing a Department of Revenue report, the article claims: “Those earning $200,000 or more account for 45% of all the income earned in the state. But they only pay 37% of the taxes.”
This is a common enough obfuscation of tax data, with the 37% figure combining all state and local taxes Coloradans pay, not just income taxes.
When narrowed specifically to the state’s income tax (which is what voters are deciding with Amendment 87), households earning more than $200,000 pay 47.9% of income taxes, despite accounting for only 44.6% of income earned. In other words, these filers actually pay more than their expected share of income tax.
Households earning less than $100,000 end up paying less income tax relative to their share of income earned.
This means that, in practice, Colorado’s flat tax is already progressive. In fact, it’s the only effectively progressive tax Coloradans pay at the state and local levels.
If “fairness” were truly the goal, the measure would be targeting other taxes, like local property taxes—not the state’s only already progressive tax.
The Response to ‘Bracket Creep’
As the Blue Book notes, Amendment 87’s new tax brackets would remain fixed and push people into higher brackets over time.
While the Sun article concedes the measure would lead to bracket creep, it tries to dampen its impact by suggesting it would take more than 50 years for someone earning $100,000 to reach the next threshold based on 3% inflation.
This suggestion ignores the fact that someone earning $100,000 today will likely receive promotions, raises, and bonuses.
It also ignores inconsistent but often significant investment income, not to mention that inflation, like people’s incomes, is not static, and a period of high inflation could quickly push people into higher brackets.
By using Colorado’s historical average inflation and real wage growth, the timeline already shortens to 36 years, but some Coloradans could certainly reach the next bracket even sooner, and without an equal improvement in their standard of living due to inflation.
For example, during the 1970s the average inflation rate was 7%, which would move the timeline forward considerably.
But even then, this timeline debate misses the bigger picture: the long-term effects of serious economic changes should matter just as much as short-term impacts.
Imagine the Colorado Sun ran a story with data claiming the world would end in 150 years due to climate change.
Even if no Coloradans alive today would witness the end of the world, would the Sun downplay efforts by Coloradans today to mitigate their impact on a looming climate catastrophe?
Why wouldn’t we treat the state’s economic health the same way?
If voters truly care about Colorado’s future, they won’t sacrifice tomorrow for an illusory benefit today, which is exactly what Amendment 87 asks.