A flat tax is a system that applies the same percentage rate to all taxpayers equally regardless of income. A graduated or “progressive” tax is a system where you pay more as your income increases. This changes the way in which Coloradans are taxed AND is a MASSIVE tax increase ($~2.7B just in the first year).
A lot of economists view this as the beginning of the end for the CO economy. This amendment would raise income taxes up to 8.4% on people earning more than $500K per year. It would MINIMALLY reduce taxes on people and businesses earning less than $100K per year. Think about our small local businesses (doctors, dentists, sports athletes and other professionals). They all work so hard and would have to pay the state nearly 10% in income taxes – a high cost just to do business in CO.
Those who can leave, will. 100% of them will pass any increases in taxes onto their customers and any money that would normally go to raises and benefits will now be going to the government. So…again…the losers will be the average Coloradan.
The flat tax is what has made Colorado so attractive for so many years. In a time when individuals and businesses are fleeing states with high taxes for those with lower ones, this puts CO among the highest tax states in the nation! If this passes it is effectively the end of TABOR as it would remove the current constitutional requirement that taxable income gets taxed at one rate.
Also…and very importantly, it is NOT TIED TO INFLATION! So…with enough time this is a tax increase for everyone. Because people’s incomes will increase pushing them into higher brackets but their purchasing power won’t keep up because of inflation.
Supposedly these funds would go towards K-12 schools, healthcare and early childhood programs. “Do it for the kids!”