By Marissa Ventrelli | Denver Gazette
Voters could see a proposal to more than double the income tax of Colorado residents who earn at least $1 million, which would raise more than $1 billion each year from this category of taxpayers.
The proposal also seeks to decrease the tax obligation of people who earn $100,000 or less, while maintaining the rate for residents whose income falls in between those two prongs.
Colorado has a flat income tax rate. Assuming the proposal made it to the ballot and voters approved it, Colorado’s top marginal rate would rival the highest-taxed states in the western region, rivaling Oregon and approximating California. Several of Colorado’s neighbors — its direct economic competitors in the region, notably Nevada and Texas — don’t levy income taxes.
The proposal would also allow the state to retain and spend all of the revenue generated by the tax hike.
Michael Fields of the group Advance Colorado said a survey outlined the proposal.
The survey asked voters if the state should increase the income tax rate from 4.4% to 9.5% for individuals who make over $1 million a year, decrease the rate to 4.2% for those who make $100,000 or less, and maintain the tax at 4.4% for people whose income falls between $100,000 and $1 million annually.
The proposal, it appears, is meant to generate support among the widest swath of voters by opting to increase the tax only for Coloradans making at least $1 million, while reducing obligations for people who earn a tenth of that amount.
The measure could appear on the 2026 ballot, as the deadline for measures to show up in this year’s election already passed. Since the proposal would change the state constitution, it would require a 55% majority vote.
The group Fair Tax Colorado attempted to place a similar measure on the 2020 ballot, but it failed to get the required number of signatures.
Fields — whose group is planning several initiatives for the 2026 ballot, such as a proposal to require the state to obtain voter approval to create any enterprise with a projected revenue from fees and surcharges of over $100 million in its first years — said the teachers’ union is also considering increasing the income tax rate for individuals who make over $300,000 instead.
“From what I am hearing, they are very serious about bringing this to voters next year,” he told Colorado Politics.
It is not immediately clear which union exactly is leading the effort, but Fields said he believes it’s the Colorado Education Association, the state’s largest teachers’ group. The union represents nearly 40,000 K-12 educators.