On Nov. 3 Colorado voters went on a leftist rampage. They:
• Trampled Trump by 13 points
• Fired Cory Gardner by 9 points
• Expanded Democratic control in the legislature
• Took Democratic control of the CU Board of Regents for the first time in decades
• Destroyed the same late-term abortion ban that is law in nearly every other state by 18 points
• Gave Colorado’s electoral votes to other states with the National Popular Vote
• Created a massive payroll tax for an unsustainable family leave program
• Repealed the Gallagher property tax limits
• Obscenely taxed smokers
• And Boulder/Denver voters unleashed freakin’ killer wolves into someone else’s back yard.
All-in-all, another banner day for progressives.
But in the midst of their orgy of command-and-control victories, something unexpected happened. Taxpayers of all political stripes struck back and strengthened the backbone of Colorado’s fiscal policy — our flat income tax and our right to consent over tax increases.
The victories of Prop 116 and Prop 117 have massive implications for the direction of the state.
Here’s the big takeaway — in the face of a pro-tax, blue wave election on the state level voters wanted more say-so over tax increases, even when disguised as fees, and doubled down on our flat income tax.
Put differently, Colorado’s tectonic shift to the far left continues, but with a strong reaffirmation and rebuilding of our Taxpayer’s Bill of Rights (TABOR) and a business-friendly tax system.
(In best Trump voice) Huge.
Slap anyone who says Colorado is purple. We’re hard-core blue and becoming more like California with elitist social engineering, stifling regulations and a booming welfare state — one in four Coloradans are on Medicaid and Denver just voted to subsidize their homeless failures even more.
But to keep Colorado from completely sliding into California-style madness we have built two policy defenses that progressives have yet to fully destroy. Our flat-rate income tax which started in the mid 1980’s and our Taxpayer’s Bill of Rights, passed in 1992, which requires voter consent to raise taxes or debt.
The Independence Institute, which I run now, was key in pushing both reforms. During the switch from a progressive income tax to our current flat one our economist, Barry Poulson, calculated that to have a revenue-neutral change the new flat rate should be 4.5%. So, of course, the legislature set the rate at 5% to give themselves a fine windfall. The more things change the more they stay the same.
When Bill Owens was governor, he twice reduced the rate to the current 4.63%. And Tuesday, some 20 years later, when given their first chance ever voters reduced it again to 4.55%.
While at first glance this looks like a mild cut, because it is, its importance is outsized.
The left had targeted Colorado for a massive, $2 billion progressive income tax scheme which would have nearly doubled the top tax rate to close to 9%. And like what we are witnessing in high-tax states like California and New York, businesses would flee Colorado.
Prop 116 blocked their progressive tax initiative from even getting on the ballot and then sent a huge “Open for business” sign over Colorado.
Don’t worry. Like the undead, the progressive income tax proposal will come around again. Just wait.
Thanks to the Colorado Supreme Court ripping a loophole the size of the Grand Canyon in TABOR, the legislature could legally raise taxes without asking for voter permission. All they had to do is call it a fee. So along came the FASTER fee, the mill levy freeze, the hospital provider fee and more, taxing us billions of dollars more every year without our consent.
But Prop 117’s victory Tuesday corrected a big part of the Supreme Court’s vandalism of TABOR. Going forward, any large “fee” increase must go to the people for approval.
This colossal repair to TABOR comes just in time. Our Democratic legislature had its sights set on all sorts of tax increases they’d call fees to avoid a public vote, including a gasoline “fee.” And maybe that’s a great idea. If so, all they’ll need to do is convince you first.
It’s nice to be asked isn’t it.
On Nov. 3 we strengthened TABOR and PERMANENTLY lowered taxes during a blue-wave state election. Read that again!
Jon Caldara is president of the Independence Institute, a free market think tank in Denver.