There are big taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. 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 taxAn individual income tax (or personal income tax) is levied on the wages, salaries, investments, or other forms of income an individual or household earns. The U.S. imposes a progressive income tax where rates increase with income. The Federal Income Tax was established in 1913 with the ratification of the 16th Amendment. Though barely 100 years old, individual income taxes are the largest source of tax revenue in the U.S. , 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 incomeTaxable income is the amount of income subject to tax, after deductions and exemptions. For both individuals and corporations, taxable income differs from—and is less than—gross income. .
Although structured as a payroll taxA payroll tax is a tax paid on the wages and salaries of employees to finance social insurance programs like Social Security, Medicare, and unemployment insurance. Payroll taxes are social insurance taxes that comprise 24.8 percent of combined federal, state, and local government revenue, the second largest source of that combined tax revenue. , 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.Share