IP-16-92 (October 1992)
Author: Independence Institute
Amendment 6, Gov. Roy Romer’s school tax increase proposal, could cost Colorado 57,000 jobs if Romer’s own economic and political assumptions are correct. A leading economic researcher says the loss could reach 75,000 jobs. No one foresees an economic boost from the tax.
Taxpayers have already been found to come last under the Children First amendment — because hidden triggers in its 33% sales tax increase would also raise property taxes and income taxes for a combined revenue hit of almost $700 million. Now its disastrous impact on the state’s economy can be seen in light of the widely recognized linkage between tax burdens and job creation.
A recent debate over that linkage occurred when Gov. Romer proposed a huge incentive package to lure the United Airlines maintenance base to Denver in 1991. The public was told then that $600 million in tax credits for United could create as many as 49,000 jobs in Colorado. Arithmetically, this reflects an assumption that one new job will result for every $ 12,250 not taxed out of the private sector. Since Romer’s economic escalator must obviously move downward at the same rate he expected it to move upward, the job-loss impact of Amendment 6 can be calculated by dividing $ 12,250 into the amendment’s total anticipated revenue.