Last week, the Tax Foundation released a paper titled, “Reexamining the Tax Exemption of Municipal Bond Interest,” which argued that lawmakers should consider reforming the current tax treatment of municipal bond...
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- Colorado Voters Reject $1 Billion Income Tax Increase
Colorado Voters Reject $1 Billion Income Tax Increase
Colorado voters widely rejected a ballot measure yesterday that would have increased state individual income taxes by nearly $1 billion in the first year. Amendment 66 would have changed the state’s income tax from a single rate system to a graduated one that taxes income below $75,000 at 5.0 percent and income above this threshold at 5.9 percent.
The tax increase would have hit taxpayers of all income levels in the state—not just the wealthy. It would have raised taxes on low- and middle-income Coloradans, in addition to any business that files taxes through the individual code. A significant share of Colorado business are classified as pass-through entities. In fact, 95 percent of firms in the state file through the individual code.
The initiative made its way to the national spotlight, in addition to receiving a large injection of funding from outside sources (as of the last campaign finance reports, proponents of the measure had raised over $10 million). According to the Denver Post,
The race attracted national attention, including support from U.S. Secretary of Education Arne Duncan, and op-eds in The New York Times and The Wall Street Journal weighing in pro and con, respectively. National money also entered the campaign in a big way, with millions from the National Education Association and late donations from New York Mayor Michael Bloomberg and philanthropists Bill and Melinda Gates supporting the measure.
Ken Simpson of the Denver Post put it eloquently: “ultimately, the state's electorate passed judgment.” The measure was defeated by almost a two-to-one margin: 35 percent of voters approved the measure, while 65 percent opposed it.
Full election results can be found on the Colorado Secretary of State’s (SOS) website. It’s interesting to note that Amendment 66 was defeated in all but two counties—Denver and Boulder, two areas of the state that tend to be more liberal. In Boulder, the margin was incredibly slim—the amendment won by only 1.3 percentage points. In Denver, it was successful by only 5.4 percentage points. It seems that Colorado voters of all political persuasions were skeptical of such a hefty tax bite.
I encourage you to browse through all of the materials we used to educate taxpayers in Colorado. You can find plenty of blog coverage here, here, here, here, and here. We also released a Fiscal Fact on the topic. For the results of other tax-related ballot measures, see this recent blog post.
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