Colorado Liberal Coalition Seeks To Unwind TABOR With Graduated Income Tax Plan

By Jesse Paul | The Colorado Sun

The plan would increase income taxes on people earning at least $506,000 in annual taxable income to raise more than $2 billion each year for things like health care, education and public safety. People earning less would get a tax cut.

A group of liberal advocacy groups is pursuing a 2026 ballot measure that would change the state constitution to enact a graduated income tax rate in Colorado and raise more than $2 billion each year for services like health care, education and public safety.

The plan would increase income taxes on people earning at least $506,000 in annual taxable income. The proposal would lower the income taxes on people earning less, who represent the vast majority of Colorado taxpayers.

The changes would also apply to business income tax rates, but supporters project most of the increased revenue would come from individuals.

“It’s just clear that we need to be putting big ideas out there and be talking about real, potential solutions,” said Chris deGruy Kennedy, who leads the Bell Policy Center, a liberal fiscal policy nonprofit.

DeGruy Kennedy, a former state representative, was alluding to Colorado’s so-called structural deficit, in which the cost of providing existing government programs and services keeps running into the Taxpayer’s Bill of Rights’ yearly cap on government growth and spending.

The main challenge for supporters of the initiative is getting it on the ballot.

Placing a measure on the ballot that alters the state constitution requires 125,000 voter signatures, including signatures from at least 2% of the voters in each of Colorado’s 35 state Senate districts. That task can cost millions of dollars — which deGruy Kennedy concedes he and his coalition don’t currently have.

“Those conversations are ongoing,” he said. “It’s not a slam dunk. We are certainly talking with folks that have the kinds of resources to fund what we need.”

Should the measure make the ballot, it would require the support of at least 55% of voters to pass.

The Taxpayer’s Bill of Rights, which is in the state constitution, requires that Colorado’s income tax rate be imposed as a single rate. That’s why it would take a change to Colorado’s constitution to make the state income tax rate graduated.

The pursuit of a graduated income tax rate represents a change for Democrats, who loathe TABOR and have been trying to unwind it for most of the policy’s 30-plus years in existence.

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