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Avoiding An Automatic Tax Increase In 1987

IP-14-86 (December 1986)
Author: John K. Andrews, Jr. and Barry W. Poulson

PDF of full Issue Paper
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In Brief

  • The State of Colorado will collect more than $250 million in higher income taxes from individuals and businesses in 1987 as a side-effect of federal tax reform.
  • Taxpayers face an average increase of 33% unless the legislature acts.
  • This shortfall in family budgets has been misleadingly described as a “windfall” by the spending lobbies, leaving many Coloradans thinking the money will come from Washington rather that their own pockets.
  • Federal promises of neutrality in tax reform are mocked by the state shortfall.
  • The Colorado General Assembly should ac to restore neutrality, increase simplicity, and maintain progressively in the state income tax by correcting the shortfall through some combination of cuts in rates and base.