DENVER — Two Denver-area activists hoping to test out the guaranteed income theory have withdrawn their initiatives from the November ballot in an agreement with Jon Caldara and the Independence Institute*.
In February, Kevin Neal Patterson II, the son of Connect for Health Colorado Chief Executive officer Kevin Patterson, and Eric Leveridge, a policy analyst for United for a New Economy (UNE), filed more than a dozen ballot proposals hoping to change the state’s constitution so that those earning above $300,000 per year would pay a much higher state income tax.
Revenue from that tax increase would have been redistributed to anyone who qualifies for the Earned Income Tax Credit, generally those who earn under $70,000.
It would have made Colorado one of the first states to test a theory that the redistribution of income empowers the poor and leads them to contribute positively to the economy by implementing a graduated income tax rate with those making more than $500,000 a year paying more than double the current rates.
Caldara, president of the free-market think tank Independence Institute (II), and Mike Krause, director of public affairs for II, filed a competing initiative: “Preserving Colorado’s Flat Tax Act,” which was approved by the state title board on April 18.
It would have kept Colorado’s tax rate flat even if another initiative passed that would repeal the flat tax.
“We filed our ballot measure because Colorado’s single income tax rate is worth protecting,” Krause said. “It’s not the plaything of some out-of-state monied interest that wants to use Colorado as their testing ground for bad ideas.”
The withdraw also comes on the heels of an endorsement of the guaranteed income scheme from a group identified by the Southern Poverty Law Center (SPLC) as an anti-immigrant hate group.
“We at Colorado Alliance for Immigration Reform find ourselves smitten with a wealth-transfer scheme targeting Colorado created by a wealthy millennial from New York City,” the Colorado Alliance for Immigration Reform boasts on its website. The “proposal might have an unintended benefit to those of us trying to stem the tide of illegal aliens pouring into Colorado. By the wording in the initiatives the “redistributions” would be transferred to Colorado “residents.” Colorado law — especially the tax code — is fairly clear that a “resident” is very different than an “illegal alien.” This plan might become the mechanism we’ve been waiting for. It could officially differentiate illegal aliens, who would not be able to get free money under the plan, from “residents,” who could. Under this plan Colorado might be able to do what ICE can’t or won’t do: identify individual illegal aliens for deportation,”
Patterson and Leveridge’s initiatives had several options that lowered the current rate for some taxpayers and raised it for others. Caldara’s initiative was written so that based on which guaranteed income option passed, all Coloradans would see their tax rate either decrease or increase to the same level, 11.8 percent at its highest.
The flat tax was added to the state’s constitution in 1992. Currently the rate is 4.63 percent.
The timing of the filings very closely coincided with the release of Facebook co-founder Chris Hughes’ new book, Fair Shot, which outlines his idea that wage earners in the top 1 percent should pay the way for those less fortunate.
Hughes calls the plan Guaranteed Income. Variations of the idea have been put forth as far back as the 1960s by Martin Luther King Jr. and economist Milton Friedman.
Hughes’ organization The Economic Security Project is currently funding a pilot project to test the idea in Stockton, Calif. known as Stockton Economic Empowerment Demonstration (SEED).
SEED will begin giving qualifying residents of Stockton $500 per month later this year to help stimulate the economy and help low income residents out of poverty, the projects website says.
Hughes said on his Twitter account that abolishing income inequality is a top priority for him: “I spend most of time thinking about how to combat income inequality through the guaranteed income.”
“Preserving Colorado’s Flat Tax Act” had a provision in it that read, “this part takes effect … only if an initiated measure passes in the 2018 Colorado General Election that repeals the portion of section 20(8)(A) of Article X of the Colorado Constitution requiring a single state income tax rate.”
After the filing, Caldara and Krause negotiated a deal to withdraw their initiative if Patterson and Leveridge withdrew all of theirs.
“Basically, our measure said that if another measure were to pass in 2018 that raised income tax rates for some Coloradans, then everyone would pay that new rate,” Krause said. “Conversely, if a measure passed that both raised rates on some people, and lowered rates for others, then everyone would pay the new, lower rate. It worked, and they blinked. The lesson here is don’t screw with our single rate income tax.”
*Complete Colorado is a product of the Independence Institute.