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Whether Colorado overhauls the state’s flat income tax rate is on the line Tuesday night.
If approved by voters, Amendment 87 would move the state to a graduated income tax code, with money directed to fund education, healthcare, and early childhood programs. It would also mark the biggest change to the state’s tax code since the 1992 Taxpayer Bill of Rights. TABOR, as it is known, also caps state government spending.
The ballot measure faces a rival in Proposition 136, which asks to keep the state’s tax structure the same.
Currently, Colorado assesses all workers and businesses a 4.4% income tax.
Amendment 87 would create a graduated income tax with six tax brackets and reduce the tax bill for the majority of residents. The rates would range from 3.7% to 8.4%, and anyone making below $500,000 a year would pay 4.4% or less. Taxpayers making over $500,000 would pay more.
The change would take effect in 2027 and generate about $2 billion more in 2028. The tax proposal also says the state wouldn’t place a cap on the revenue. This means no money raised by the measure would be required to be refunded to taxpayers.
The competing Proposition 136 measure asks voters to keep the flat tax rate unchanged. If both Amendment 87 and Proposition 136 pass, there would be a legal conundrum.
Normally the measure with the highest number of yes votes would take effect. However, the state’s ballot book says if both measures pass, the outcome is unclear, and the state Legislature or a court will need to resolve the conflict.
Advance Colorado filed Proposition 136 as a countermeasure to protect TABOR, and has said Amendment 87 will hurt working families and seniors. Meanwhile, Amendment 87 supporters say it would reduce taxes for 97% of Colorado taxpayers.
Check back here for election results starting at 7 p.m.
Jason Gonzales is a reporter covering higher education and the Colorado legislature. Chalkbeat Colorado partners with Open Campus on higher education coverage. Contact Jason at jgonzales@chalkbeat.org.
