Earlier this month I highlighted a potential tax compromise brewing in Illinois. State senate Republicans and Democrats released a proposal to increase Illinois’s individual income tax and corporate income tax, expand...
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- Colorado Businesses Opposed to Income Tax Hike
Colorado Businesses Opposed to Income Tax Hike
Colorado voters will see a hefty tax hike on the ballot this November--a $950 million tax hike, to be exact. And that's just in its first year. Amendment 66, formerly Initiative 22, would change Colorado's individual income tax from a single rate of 4.63 percent on all income levels to a two-bracket system. Incomes under $75,000 would pay 5.0 percent; incomes over that would face a rate of 5.9 percent. That's a 27 percent increase in top rate. The measure would put the increased income taxes towards higher education funding throughout the state.
The Colorado branch of the National Federation of Independent Business conducted a poll of member business owners within the state and found low support of such a tax measure. Ninety-six percent of poll participants said they opposed the amendment.
A majority of firms within Colorado are what we call "pass-throughs" because their business income tax is "passed through" to individual owner, rather than paid by the actual business entity itself. According to a 2011 Ernst and Young study, 95 percent of firms in Colorado are pass-throughs. Amendment 66 would raise taxes on all of them.
It's easy to point to higher-income taxpayers and say that they should be paying more but it's important to remember that a lot of those "higher incomes" are businesses filing through the personal income tax. After-tax income for these individuals isn't simply take home pay. It's money that is reinvested back into their firms, further contributing to Colorado's economy.
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