Many people are beginning to wrap their minds around the House Republicans’ proposed destination-based cash-flow tax and what it means for tax reform. Most people are still looking into the tax’s impacts on trade and how...
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- New Paper on the ColoradoCare Amendment
New Paper on the ColoradoCare Amendment
There are big tax increases, and then there’s Colorado Amendment 69. It’s “double the budget” big, and it’s on the ballot on November 8th.
The Amendment, which would establish a single-state public option health care system called ColoradoCare, would levy a new 10 percent payroll and income tax on top of the state’s existing 4.63 percent flat individual income tax, yielding a rate of 14.63 percent—the highest in the country. And whereas the next highest rate (California’s top marginal rate of 13.3 percent) is only imposed on income above $1 million, Colorado’s 14.63 percent combined rate would apply against the first dollar of taxable income.
Although structured as a payroll tax, the tax is imposed on all income, not just wage income. When earned as wage income, a 6.7 percent tax is imposed on their employer and 3.3 percent is withheld from the employee, even though even the proponents of the tax agree that the entire economic incidence of the tax falls on the employee.
Amendment 69 is unique inasmuch as it would establish an independent political body, not accountable to the legislative or executive branches, to administer ColoradoCare, levy the taxes that fund it, and administer the elections that govern it. Our new paper explains what ColoradoCare is, how it would work, and what the tax implications are. Should Coloradans adopt the amendment this November, the state would drop from 16th to a projected 34th overall on the State Business Tax Climate Index.
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