The newest iteration of the so-called “progressive” income tax hike being pushed for the 2026 Colorado ballot raises serious concerns that it does much more than its proponents would have voters believe.
Peering beyond the slogans and apparent doublespeak, Initiative 181 bears a disconcerting resemblance to Proposition HH, which voters wisely shot down in 2023.
Promises versus reality
As Jake Fogleman previously explained, a progressive income tax “promises fairness but delivers instability and demagoguery.”
Supporters of the $4.1 billion tax increase make several promises, many of which can be easily refuted. For example:
- Promises of improving budget stability fall flat as Colorado’s state spending continues to grow despite endless catastrophizing claims, and that becoming more reliant on fewer Coloradans for tax revenue will certainly increase budget volatility.
However, one outcome that Initiative 181 may actually deliver on is the erosion of Coloradans’ right to taxation with representation.
Sleight of hand
Colorado’s Taxpayer’s Bill of Rights (TABOR) remains popular for several reasons.
The most potent of these reasons is that TABOR ensures direct voter participation in taxing decisions, in a way that would make Thomas Jefferson jealous.
Voters understand that without a check on government spending, Colorado would not be as free or economically prosperous.
In turn, Coloradans tend to be generous to sound tax changes, so long as they are asked first.
However, as it is currently written, Initiative 181 appears to remove the consent of the governed by quietly shifting the tax law from the state Constitution to the statutes, potentially depriving Coloradans of their ability to vote on future tax decisions.
In other words, what at first glance appears to simply be a misguided tax hike now looks as though it could undermine a fundamental component of Colorado’s long history of voter participation in tax policy.
Beyond that, 181 would completely remove the additional $4.1 billion in annual dollars the tax is projected to generate from the modest population plus inflation revenue limitations imposed by TABOR. Meaning the state can keep and spend in perpetuity those overcollected tax dollars which would otherwise be refunded back to taxpayers.
Deja vu
Come what may, the situation feels eerily similar to what happened just a couple of years ago.
Many Coloradans likely remember Proposition HH in 2023, which promised to lower property taxes at the expense of TABOR refunds.
Luckily, the measure was handily defeated when voters realized that eroding TABOR would result in a much larger long-term tax increase than its proponents had advertised.
Unfortunately, Coloradans were recently duped into approving higher taxes for the Healthy School Meals for All (HSMA) program, even though the program was already operating within budget and low-income children would continue to receive free lunches regardless of whether Propositions LL and MM passed.
Proponents of the proposed “progressive” tax will be counting on their recent success and hoping that Coloradans forget how ardently they rejected Proposition HH just a couple of years before.
Despite new euphemisms and subtle tactical changes, the ultimate aim of Initiative 181 is to dig deeper into Coloradans’ pockets while eviscerating the long-standing taxpayer protections in TABOR.
