Democrats and unions try to kill Colorado's flat tax.

Wall Street Journal
October 24, 2013

Colorado has veered to the political left in recent years, and on November 5 it may take another leap toward California. The Democrats and unions who now run state government are promoting a ballot initiative that would raise taxes and unleash a brave new era of liberal governance.

The Colorado Tax Increase for Education, or Amendment 66, follows the well-trod union script of claiming to raise taxes in the name of better schools. Its real purpose is to repeal restraints on tax increases and open the door to even higher taxes and more spending on everything.

The referendum would repeal the state's current flat income-tax rate of 4.63% that liberals loathe because raising it requires raising taxes on nearly all Coloradans. And sure enough, Amendment 66 would raise the rate to 5% on income up to $75,000, and to 5.9% on all higher earners. That's a 26.6% tax increase on anyone making more than $75,000 a year.

That's also a $950 million revenue increase for politicians in the first year alone, but the real prize is down the road. Once a graduated tax code is in place, unions and Democrats will try again and again to raise tax rates on "the rich." This has happened everywhere Democrats have run the show in the last decade, from Maryland to Connecticut, New York, Oregon and California. Within a decade, the top tax rate will be closer to 8% or 9%.

Colorado's liberals may aspire to join the left coasts, but that won't make the state any more competitive in its interior U.S. neighborhood, where states like Kansas and Oklahoma are cutting tax rates. High-tax states created one net new job for every four in states without an income tax from 2002-2012, according to a study for the American Legislative Exchange Council.

Polls show that the main issue for Colorado voters now is the economy. That's not surprising given that household incomes in Colorado remain 7.2% below pre-recession levels, according to Census Bureau data. A 2011 study by Ernst & Young found that more than half a million small businesses in Colorado, or 92% of all in-state businesses, pay taxes at individual tax rates and thus would face a tax increase under Amendment 66.

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