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June 26, 2009 01:41 AM UTC

It's the revenue, people.

  • 23 Comments
  • by: COFPI

Colorado is home to a great many wonderful attributes.  Our fiscal system is not one of them.  That’s driven home by yet another bit of empirical evidence showing that our state-the 8th wealthiest in the country, at last check-continues to lag woefully behind most every other state when it comes to investing in key job-creating areas like education, health care, higher education, and transportation.

We’re 47th in total state investment, 48th in K-12 education, 49th in health care for low-income families, 35th for health care for low-income children, 48th in higher education, and 48th in transportation and infrastructure.  Good times, so long as you or your family don’t use bridges and roads, go to public school, want your kids to go college, want families and children to have access to health care, and want to be economically competitive with any or all of our mountain west neighbors.    

These rankings are not really a surprise when you consider that Colorado ranks 49th in state taxation and 46th in combined state and local taxation (per $1000 personal income).  It’s not rocket science, it’s just the other side of the ledger.

Now, of course, there are many ideologues who think investing so little in our future is a good and noble thing – that to bleed the public sector dry until there is nothing left is the righteous path to progress.  Not so.  

These loud but few public service cut-and-runners are either unable or unwilling to see the writing on the wall:  it’s the revenue, people.  Simply put, Colorado lawmakers and voters have built a system of government that our revenue cannot sustain.  And we can’t just cut our way out of this problem.    

While other states continue to invest more in the very areas that create jobs and bring economic growth, Colorado continues to lag behind.  Our neighbors in Kansas, Utah, Wyoming, and elsewhere continue to invest more in their schools, their roads, their colleges, their health care system, and their economic future, while we stand frozen by the prospect of addressing our revenue problems.  What does that say about our priorities here in Colorado and the kind of state we want?

Comments

23 thoughts on “It’s the revenue, people.

  1. . . . to the frog in the pot on the stove.  That’s why so many think the never-ending budget cuts are fine, really a success (i.e. the frog is feeling comfortably warm)!  And why so many others just simply don’t understand the problem well enough to be concerned.  We are desperate for a leader (a strong, effective, visible leader) on this issue.  Who will it be?!!

    1. People in Denver, Aspen, Vail and Telluride need to have their property taxes tripled.

      Further we need an asset tax, say 10%/annum, on total worldwide assets for anyone owning or leasing a residence in Colorado.  Of course it only applies to folks with more then $100 or 200 million in worldwide assets.

      That just might solve that tax/income ratio you jackwads keep yapping about.

    2. the tax burden was lowered over time late 1970’s though mid 2000’s.

      As that (lowering of the tax burden) occurred incomes rose dramatically in Colorado.

      Its an interesting concept to study … taxes go down and incomes rise.

      1. where taxes went up and so did income?

        Were there any states where income went down in that period – no matter whether their taxes went up, stayed the same or went down?

        http://www.youtube.com/watch?v=7QDv4sYwjO0

        The bigger question COFPI is raising- and not addressed by your numbers – is whether can afford to better fund public investments.  Obviously, some Coloradans believe the answer is yes.

        Your post and previous similar posts suggest there is a better way to measure whether we can afford more public funding of anything – though you are not explicit what that measure should be.

        And you imply that government is either too big or just big enough. By what do you measure that ?

      2. that people who have absolutely no understanding of economics always shore up their unbelievably weak arguments with some claim to economic legitimacy?

        1) Correlation is not causation, does not imply causation, and can’t rationally be used on its own as evidence of causation. Otherwise, it’s completely obvious that ice-cream consumption is the principle cause of death by drowning, since the rates of the two phenomena are very strongly correlated (figure it out, Einstein).

        2) Actual economic studies demonstrate a far more complex relationship between taxation and income than you, for some reason, seem capable of grasping. The most important point to get, which you clearly don’t, is that economic growth is a non-linear phenomenon: a constant increase or decrease in any one significant independent variable results in an economic growth curve which hits one or more local (or global) optima before rising or falling again.

        Your repeated, silly, absolute statements about a presumed linear relationship between taxation and economic growth are just plain ignorant, as ajb’s simple and obviously accurate response makes clear. If you want to chip away at some of that granite fortress of ideological self-delusion in which you are so blissfully ensconsed, here are some places to start:

        an abstract of a scholarly work quickly identifying some of the complex feedback loops involved

        Title refers to another scholarly work which describes the role of government spending in fostering economic growth; text not available through this link

        A nice allusion to the non-linear complexity of economic growth and the need to consider that complexity in assessing the relative impact of different variables

  2. -Colorado Ranks 3rd in Nation in Local Sales Tax Per Capita

    -Colorado Ranks 2nd in Nation in Local Sales Tax per $1000 of Personal Income

    -Considerably Above National Average on Both Measures

    data from TaxFoundation circa 2001

    ———————————

    Local Tax Collections Per $1,000 Income

    State Rank Tax

    New York 1 $81.52

    Colorado 6 $52.86

    U.S. Average n/a $47.06

    Delaware 50 $20.82

    data from Leg Council circa 1997 and with all the local de-brucing that occurred you can bet your sweet cheeks this hasn’t changed much.

    1. The subject is combined state & local taxation and Libertad comes back with statistics that are restricted to just local taxes.

      Well, duh. If CO is 49th in state taxes and 46th in combined state & local, then local only is going to rank significantly higher.

      But even using Libertad’s preferred source (taxfoundation.org) we find this very clear statement:

      Colorado’s State/Local Tax Burden Below National Average

      Colorado has dropped 19 places in the state/local tax burden ranking over the last 30 years. It levies every major tax, but the rate on each is among the lowest in the country. [emphasis added]

        1. but the point of this is that we could drop the tax burden to zero, incomes would go up, and life as we know it would go in the crapper. I know, it’s a tough conversation to have with anarchists, but maybe that’s just how you roll…

        2. it’s a tough conversation to have with economists.

          And, from my point of view, it’s a tough conversation to have with someone who is so selective in the data they use (to the extent that they use any).

          It’s true, in fact, that there are studies which show that dramatic tax reform in most modern well-taxed nations does lead to a  rise in both upper-level income and (far more marginally) to overall economic growth. It’s also true that our own Republican fiscal policies implemented for most of the past 30 years have created a rapidly accelerating polarization between rich and poor, a greater disparity between the highest few wage earners (who earn most of the wealth created by those reforms you love so much) and the vast majority, whose real incomes have declined.

          A complete analysis of the American economy shows, unambiguously, that most Americans’ real income has declined since the initial implementation of Reagonomics. Conversely, in countries with more emphasis on fairness and less on indiscriminate efficiency, the lowest wage earners still make a decent living, while the highest are slightly less obscenely wealthy than our own highest salaried earners.

          It’s a question of values: What’s more important, that the richest get richer more rapidly, or that the hard-working poorest are less poor? Sometimes, enriching the rich expands the pie in ways which serves the working-poor, and sometimes it doesn’t. You have to do the analysis and look at the data.

          The whole purpose is not “to raise people’s incomes;” the whole purpose is to increase the quantity, sustainability, and justness of access to all that which contributes to human welfare and fulfillment. Because, otherwise, by your formula, if I make two people wealthier, I have satisfied “the whole purpose,” regardless of whether the other 300,000,000 are condemned to the pits of destitution in the process.

          When you think and speak clearly, you avoid such errors.

    2. Depending on the data contrasts you work from anything can be spun as this diary was.

      Figures lie and liars figure, so it’s easy to always rank Colorado 49th for your cause d’jour.

    3. Your figures, wherever they come from, are wildly out of date. TaxFoundation.org states that, based on their property tax index for 2009, Colorado has the 6th best business climate in the United States.

      For your benefit, I put together a chart using U.S. census data showing the changes in state tax collection per capita since 2000. Colorado ranks somewhere between 24th and 26th each year.

      As you can easily see, per capita tax revenues have increased a little bit each year since Referendum C was passed, but the amount is still less than $2,000. It’s scary to imagine the budget carnage that would have resulted without Ref C, though.

      BTW, I first read How to Lie with Statistics way back in high school in the 70s. I suggest that you study it thoroughly before you post any more of your “statistics” to avoid further embarrassment.

  3. “Estimated at 9.0% of income, Colorado’s state/local tax burden percentage ranks 34th highest nationally, below the national average of 9.7%. Colorado taxpayers pay $4,359 per capita in state and local taxes.”  This is from taxfoundation.org, which has interesting charts comparing the states since 1977.

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