Governor Polis played an important role in killing two of the most anti-business bills introduced this legislative session, in a rare moment of follow through on his proposed tax policy.
Is it too little too late?
How Polis Killed the Bills
House Bills 1221 and 1222 were part of a four-bill package by progressive lawmakers that Mike Rosen dubbed the “Four Big Ugly Bills,” for their obvious hostility to Trump’s One Big Beautiful Bill Act (OBBBA) and anti-business aims.
Because Democrat lawmakers could not stand that the OBBBA cut taxes for most Coloradans, they designed the four bills to decouple aspects of the Colorado tax system from federal policy and eliminate certain tax breaks that businesses enjoy.
However, they would maintain tax breaks for the Family Affordability Tax Credit (FATC) and things like electric vehicles for rich people.
According to the Democrat sponsor of HB-1222, Cathy Kipp, and as reported by the Sum & Substance, Jared Polis promised to veto the bills unless a portion of the new revenue would be used to lower Colorado’s flat state income tax.
Because Kipp thought that lowering the state flat income tax (in exchange for hamstringing Colorado businesses) was “irresponsible,” she asked the Senate Finance Committee to postpone the bill indefinitely.
Campaign Promises
To those who remember Polis’ 2018 campaign for Governor, eliminating tax loopholes and using the increased revenue to “buy down” the income tax rate was a popular campaign promise.
Colorado’s free-market think tank, Independence Institute, was initially optimistic about such a tax policy because it would increase the tax base while lowering individual Coloradans’ tax burden.
The think tank published multiple reports analyzing Governor Polis’ words versus actions on taxes.
Unfortunately, time has not been kind to Governor Polis’ tax policy promises.
Instead of lowering and eliminating tax breaks, they exploded under Governor Polis’ watch.
That said, Polis’ stated desire to lower the income tax while reducing special-interest loopholes was and remains a commendable idea; it would be better to eliminate both if possible.
However, not all tax breaks are created equal, and targeting those that help keep Colorado somewhat economically competitive is probably worse than targeting those that benefit people who generate the least economic activity (and thus the least revenue for the state).
Apparently, Governor Polis understands that tax breaks for things he likes become unaffordable if the economy isn’t doing well.
If only he had followed through on his proposed tax policy from the beginning, all Coloradans would be paying lower taxes, the population would still be climbing, and the economy would not be sputtering as it is now.
