Proposition 116: State Income Tax Rate Reduction

Based on population (5.691 million) and income data from 2018, 96.74% of Coloradans had a taxable income of $150,000 or less per year. That means that only 3.26% of the state's population made $150,001 or more. Yet, all those people paid the same percentage in income tax: 4.63%.

This income tax largely goes towards the general fund, which supports K-12 education, public assistance, courts and other basic state-funded services.

Proponents of the measure, such as the Colorado chapter of Americans for Prosperity (an organization funded in part by the Koch brothers), argue that it's a modest tax cut. "In this challenging time, Coloradans need tax relief to invest in their families and small businesses," said Jesse Mallory, the state director of the Americans for Prosperity Colorado Issue Committee.

By using the numbers above, if a family has taxable income of $150,000, they'd be taxed approximately $6,945 under the current tax code. If Prop 117 passes, a tax rate of 4.55% would provide approximate tax relief of $120 for that same family.

Other groups opposed the ballot issue. "We will have to cut more than $200 million from important programs in the first year and $154 million every year thereafter," said Protect Colorado's Recovery Campaign Manager Peter Hinga.

Hinga says that of the tax revenue that would be saved, at least 50% of it will go to the top 3% of Colradans.

So, while Mallory and proponents argue that this would help put money in people's hands and therefore get the state budget back on track, Hinga and opponents fire back that the state has already seen significant cuts due to COVID.

Both sides have seen a lot of support, but it's so far unclear if one side or the other is really coming out ahead.

In addition to there being disagreement about the degree of tax relief that individual families will see, there's also the dispute around the fact that Colorado has a flat tax system, unlike the federal income tax system, which imposes a higher tax rate on those with higher incomes.

Mallory said that graduated income tax systems guarantee that people and businesses will leave the state. "Flat tax rates are the fairest of tax codes. They create consistency and predictability for individuals and businesses."

"With our flat tax structure, this cut would largely benefit those at the top," argued Hinga, "people already doing well in this period, and give minimal to zero relief to the majority of Coloradans."

The secretary of state's office puts out lists of groups both in favor and in opposition to various ballot measures. More information can be found here.

For more information about the proponents, Americans for Prosperity, visit: americansforprosperity.org/state/colorado/

For more information about the opponents, Protect Colorado's Recovery, visit: no116and117.com/