2020 Election, Featured, Governor Polis, Proposition 116, Taxes, Uncategorized

Sonnenberg: Proposition 116 benefits all Colorado taxpayers

The beauty of Proposition 116 lies in its simplicity: It will decrease taxes for all Colorado taxpayers. Period.

That’s why shortly after the measure got approval for the November ballot, Governor Jared Polis praised the idea of a tax cut, saying, “We’ve long sought an income tax decrease [and] particularly in this challenging time, I think Coloradans certainly need tax relief.”

He’s right, and there are countless reasons why now is the time for a modest 0.08% cut in the state’s income tax rate. The only downside to the measure is that it won’t even come close to offsetting all the new taxes Coloradans are paying without having consented.

For starters, the 2017 Trump cut to federal taxes actually increased state tax revenues by billions of dollars. Coloradans had no chance to vote on this tax increase.

This happened because changes to federal tax law in 2017 increased the amount of your income subject to tax, but the state did not decrease your tax rate to balance out that increase. If you earn $50,000/yr., for example, $20,000 of that might have been subject to income tax before the changes and $25,000 after the changes.

To ensure your federal tax bill still went down, the feds significantly lowered tax rates. Conversely, Colorado kept their rate at 4.63% even though more of your money is now subject to income tax. The result is a higher state income tax bill for you without your approval.

To fix this, I introduced legislation in the last two legislative sessions to decrease the income tax rate. Unfortunately, the bills never made it through the legislature.

That’s why I, together with Independence Institute President Jon Caldara, proposed a ballot initiative this year to reduce the income tax rate from 4.63% to 4.55%.

With COVID-19, Coloradans need a lifeline now more than ever. Rather than providing real relief to struggling families and businesses, the state legislature simply handed out federal CARES Act dollars and then patted themselves on the back. In fact, one bill, HB 1420, actually robbed struggling businesses of several COVID-related tax relief measures. Simply put, Proposition 116 gives voters the power to provide themselves with the relief that the General Assembly refused to deliver.

Opponents will say that a tax cut would be irresponsible given the state’s budget shortfall. That’s nonsense. In this legislative session, from two bills alone, the state will generate over $170 million in new revenues next year. None of it was approved by voters. According to the legislature’s own analysis, that’s more than the cost of the proposed tax cut.

And let’s not forget, if the legislature had stashed away the influx of unexpected cash from Trump’s tax law instead of treating it like their new-found piggy bank, the state budget would be in a much better place. Where’d all that money go?

Outside analysis by the non-partisan Common Sense Institute finds that this tax cut will expand the state’s economy and create new jobs. Instead of causing a budget crisis, a vote for Proposition 116 will create new jobs and economic opportunity while helping to offset some of the new taxes and fees the legislature does not let you vote on.

The opposition also says the Colorado tax code isn’t fair, and that this measure is a tax cut for the wealthy that will make it even more unfair. Their argument is deeply disingenuous.

To be clear, this measure provides an equal tax cut for every income taxpayer. Yes, there are people who pay no income taxes, because they don’t earn enough money to have any income tax liability. But every working-class Coloradan who pays income tax will get the exact same cut as anyone else who pays income tax. That’s fair.

Curiously, while complaining about our tax code not being fair to the poor, opponents of this equal tax cut for all are supporting three ballot measures that would increase taxes on low and middle earners more than on high earners. Now that’s not fair.

The simple truth is, Proposition 116 is a mild but much-needed tax cut for all taxpayers at a time when Coloradans could use the boost wherever they can get it. Governor Polis gets that, which is why he supports it.

On November 3rd, taxpayers will have the opportunity to give themselves and our economy a boost by voting “yes” on Proposition 116.

Jerry Sonnenberg is a state senator from Sterling representing Senate District 1. 

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