Amendment 87: Graduated Income Tax
NCSL lists initiative number; official ballot designation differs (mapped by title)
CO has no rebuttals; Blue Book arguments are written by Legislative Council Staff.
Page numbers/running headers removed from extracted text.
SHALL STATE TAXES BE INCREASED $2.7 BILLION ANNUALLY, IN ORDER TO INCREASE OR IMPROVE LEVELS OF PUBLIC SERVICES, INCLUDING K-12 PUBLIC SCHOOL EDUCATION, HEALTH CARE, AND EARLY CHILD CARE AND EDUCATION SERVICES, BY AN AMENDMENT TO THE COLORADO CONSTITUTION AND A CHANGE TO THE COLORADO REVISED STATUTES REPEALING EXISTING LAW AND CREATING NEW LAW TO REPLACE THE UNIFORM STATE INCOME TAX RATE WITH A GRADUATED INCOME TAX STRUCTURE, AND, IN CONNECTION THEREWITH, AMENDING THE TAXPAYER’S BILL OF RIGHTS TO ELIMINATE THE CONSTITUTIONAL REQUIREMENT FOR ALL TAXABLE NET INCOME TO BE TAXED AT ONE RATE WITH NO ADDED TAX ON INCOME; ESTABLISHING VARIOUS INCOME TAX RATES BASED ON THE AMOUNT OF TAXABLE INCOME EARNED BY INDIVIDUALS, ESTATES, TRUSTS, AND CORPORATIONS, WHILE MAINTAINING THE CURRENT 4.4% TAX ON INCOME FROM THE SALE OF A PRINCIPAL RESIDENCE, WHICH WILL RESULT IN THE ESTIMATED CHANGE IN INCOME TAXES OWED BY INDIVIDUALS AS IDENTIFIED IN THE FOLLOWING TABLE; AND AUTHORIZING THE STATE TO RETAIN AND SPEND ANY INCREASED REVENUE FROM THE NEW TAX STRUCTURE, AS A VOTER-APPROVED REVENUE CHANGE, TO SUPPLEMENT CURRENT LEVELS OF FUNDING FOR K-12 PUBLIC SCHOOL EDUCATION, HEALTH CARE, AND EARLY CHILD CARE AND EDUCATION PROGRAMS? Amendment 87 Change in Income Taxes Owed by Income Category Income Categories $25,000 or less Current Average Income Tax Owed Proposed Average Income Tax Owed Proposed Change in Average Income Tax Owed if Passed + or ‑ $751 $632 -$119 $3,828 -$298 $25,001 - $50,000 $59 $50 $50,001 - $100,000 $1,877 $1,666 $200,001 - $500,000 $9,344 $9,019 $100,001 - $200,000 $4,126 $500,001 - $1,000,000 $19,288 $18,963 $2,000,001 - $5,000,000 $41,196 $55,110 $1,000,001 - $2,000,000 $29,432 $34,196 -$9 -$210 -$325 -$325 +$4,764 +$13,914 Income categories use adjusted gross income reported to the federal Internal Revenue Service.
A “yes” vote on Amendment 87 creates a graduated state income tax that increases revenue; uses the additional money for K-12 education, health care, and early childhood care and education; and exempts additional revenue collected from the state’s constitutional revenue limit.
A “no” vote on Amendment 87 keeps the current constitutional requirement for a flat state income tax rate.
Not published by the state
Taxpayer Impacts Amendment 87 will decrease the amount of income tax owed by taxpayers with Colorado taxable income of less than $510,834 and increase the amount of income tax owed by taxpayers with Colorado taxable income of $510,834 and above. State law requires Legislative Council Staff to estimate the potential tax burden on affected taxpayers within specified federal adjusted gross income categories. Federal adjusted gross income is total income from all sources, with certain adjustments, as determined when filing federal income taxes. Colorado taxable income, calculated when filing state income taxes, is based on federal adjusted gross income with additional adjustments required or allowed under state law. Table 3 shows the expected change in tax burden by federal adjusted gross income category. The measure has no impact on current TABOR refunds or TABOR refund mechanisms. Table 3 Estimated Impact on Taxpayers by Income Income Category Estimated Number of Taxpayers Total Change in Tax Burden Average Change in Tax Burden $15,000 to $29,999 408,924 -$16,093,434 -$39 $14,999 or less $30,000 to $39,999 $40,000 to $49,999 $50,000 to $69,999 $70,000 to $99,999 $100,000 to $149,999 $150,000 to $199,999 $200,000 to $249,000 579,309 272,616 238,539 443,000 408,912 -$29,611,480 -$38,651,945 -$85,925,358 -$93,232,609 408,912 -$115,554,178 102,228 -$33,224,100 238,532 $250,000 to $499,999 204,456 $1,000,000 or more 46,328 $500,000 to $999,999 -$638,951 55,900 -$77,522,900 -$66,448,200 -$15,893,609 $1,208,468,497 -$1 -$109 -$162 -$194 -$228 -$283 -$325 -$325 -$325 -$284 +$26,085 Income is federal adjusted gross income, not Colorado taxable income; therefore, the income ranges and tax rates do not align with those in Table 2. The estimated number of taxpayers column counts joint filers as one taxpayer. Estimates are based on Colorado Department of Revenue data for all residents for tax year 2023 and Legislative Council Staff estimates. State Revenue By replacing the state flat income tax with a graduated income tax, the measure increases revenue from income taxes by an estimated $958.4 million in budget year 2026-27, $1.972 billion in budget year 2027-28, and increasing amounts in future years based on income and population growth. The estimate for budget year 2026-27 represents a half-year impact for tax year 2027. The additional revenue will be credited to the Colorado Future’s Account created in the measure. The increased revenue is exempt from TABOR as a voter-approved revenue change. The state budget year begins each July 1 and ends on June 30. State law requires Legislative Council Staff to include an estimate of the maximum dollar amount of the change in state government revenue for the first full fiscal year of a proposed tax increase. This is the number that appears in the ballot question. The estimates in the previous paragraph represent the revenue impact of the measure under the current Legislative Council Staff revenue forecast. Based on forecast error that could occur, the maximum dollar amount of the change in state government revenue and fiscal year spending for budget year 2027-28 is estimated as an increase of $2.7 billion. State Spending The measure increases the amount of state revenue available to spend for the purposes identified in the measure, including K-12 education, health care, and early childhood care and education, in FY 2026-27 and future fiscal years. To administer the tax rate change, the measure is expected to increase one-time spending in the Department of Revenue by $98,000. School District Revenue and Spending The measure increases available state funding to school districts. The exact amount distributed to school districts will depend on decisions made by the General Assembly when allocating money from the Colorado Future’s Account.
1) Amendment 87 cuts taxes for 97 percent of taxpayers, including most households and small businesses, while increasing taxes only for top earners who have the ability to pay. A graduated income tax is more equitable than a flat tax because it recognizes a fundamental economic reality: each dollar taxed on someone earning $30,000 imposes a far greater hardship than each dollar taxed on someone earning $1 million. By aligning tax rates with taxpayers’ financial means, a graduated tax distributes the burden more justly across all income levels, lowers taxes for most Online at: leg.colorado.gov/bluebook households and small businesses, and puts more money in the hands of working families who will spend it in their local communities. 2) The measure funds critical services at a time when additional funding is desperately needed. Crucial programs are at risk of further cuts because of changes in federal policy. Revenue from the graduated tax will fund education, health care, and child care, public services that many Colorado households rely on. Colorado public schools are significantly underfunded, and constraints on the state budget make Medicaid cuts increasingly likely. Additional funding will provide more security for the people who depend on these services. 3) The graduated income tax is not an experiment, but a proven approach for funding essential public services. The federal government and 27 other states already have a graduated income tax. This tax structure lessens rising wealth inequality and increases funding for state programs. Sales and property taxes place greater burdens on lower-income households, and a graduated income tax corrects for this inequity while also funding services for all Coloradans.
Colorado Legislative Council Staff (Blue Book; arguments are prepared by nonpartisan staff with public comment, not signed by proponents)
1) The measure is a multibillion-dollar tax increase, and hiking taxes on higher incomes will harm Colorado’s economy. Higher tax rates make Colorado a less competitive place to start and grow a business, and may encourage some high earners to leave the state entirely. When businesses and high-earning individuals relocate, people at all income levels may lose their jobs. Further, because the brackets do not increase with inflation, more and more taxpayers will pay these higher taxes each year. Colorado cannot risk employers and jobs fleeing the state because our taxes are too high. Keeping taxes competitive for everyone fuels economic activity and builds a stronger, more prosperous Colorado for all. 2) The measure is an attack on the fair and predictable tax system that TABOR currently guarantees. The state’s current flat tax is fair because everyone has equal access to state services, high-income earners already pay more taxes, and low-income earners qualify for more tax deductions and credits. The state should better prioritize the tens of billions of dollars it already collects, rather than switch to a new, complicated tax system. 3) The measure will permanently expand the size of government, increase careless and wasteful spending of taxpayer dollars, and hinder economic growth. Instead of spending billions of dollars more on broadly defined government services, state policy should focus on lowering taxes for everyone or funding specific programs that are proven to help Colorado’s residents.
Colorado Legislative Council Staff (Blue Book)
Both columns use the same layout. Text is quoted from the official state guide. Views expressed belong to the argument authors.