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March 22, 2011 12:21 AM UTC

Graduated Tax Measures Pulled; Heath's Proposal Loses Sunset

  • 27 Comments
  • by: Colorado Pols

The Colorado Statesman’s Marianne Goodland reports:

Ballot measures on taxes that were headed to the November ballot are being pulled by their sponsors, Sen. Rollie Heath, D-Boulder, and the Colorado Fiscal Policy Institute, but for very different reasons.

Heath told The Colorado Statesman Monday that he’s pulling his citizen initiative that would increase the rates of state income and sales taxes for three years, in favor of a measure that would make the increases permanent.

The Colorado Fiscal Policy Institute decided to pull its ballot measures, six of them in all, because the Institute ran into opposition from chambers of commerce and believed that those groups would raise millions of dollars to defeat whatever showed up on the ballot…

Heath hasn’t yet pulled the first proposal, but said he would do so after he runs it past the Title Board. As to his reason for pulling the proposal, “with the 60 percent requirement I’d be crazy to do a three-year sunset” on it, he said Monday. The 60 percent requirement is contained in a referred measure, Senate Concurrent Resolution 11-001, currently in its final stages in the General Assembly. SCR 1 requires any changes to the constitution pass with at least a 60 percent majority.

The Colorado Fiscal Policy Institute’s proposal for a graduated or “progressive” state income tax, which would (to remedially explain) charge high income earners a higher percentage than lower and middle-income taxpayers, would raise the largest amount of revenue–enough, say proponents, to balance the state budget and start backfilling the last few years of painful cuts. The graduated tax proposal also consistently polled higher than the simpler proposal from Sen. Rollie Heath to raise taxes uniformly across all income brackets.

The problem for COFPI was support: Gov. John Hickenlooper made it clear that he will not support any tax measures during his first year in office, and the major business and commerce associations, from what we’ve been told, very bluntly told proponents that they would raise millions of dollars to fight a graduated income tax. We’re a little surprised at the way that proponents were treated by the business community, who seems to have given COFPI no more respect than they did Doug Bruce–whose “Bad 3” measures were truly destructive.

Our understanding is that business interests are less inclined to fight Sen. Heath’s proposal, as it’s much better for the bottom line of high income earners–but we haven’t heard if they plan to support it, either. Liberals, on the other hand, weren’t very enthusiastic about Heath’s plan because it doesn’t raise as much revenue, and higher sales tax arguably hurts lower income people more than a higher income tax would hurt the wealthy. Now that Heath has removed the “sunset” provision and the more attractive alternative is dead, perhaps that will change.

Because the choice is now to back Sen. Heath, or keep waiting for that elusive “right moment.”

More commentary here.

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27 thoughts on “Graduated Tax Measures Pulled; Heath’s Proposal Loses Sunset”

  1. These are the same “business leaders” who expect to have a skilled workforce, right?

    Colorado is not a community to these people. We are just a wealth extraction facility. It’s very sad.

    I will back Sen. Heath’s plan, though. Something beats nothing.

      1. Now, if you’ll influence your compatriots to withdraw from the Chamber (which, by the way, is just one huge, super-funded, corrupt corporate “union”), you’ll have taken that extra step toward entreprenurial greatness

  2. that most “responsible” voters should have few problems with it.  It stands a chance if the chambers merely oppose it without funding the opposition.

    It also depends on who votes in this November’s “off-year” election.

    I love the idea of making it permanent because it ties into the governor’s idea of permanantly restructuring the state’s budget.

  3. but I am opposed to doing something that is either inadequate or done incorrectly. I’m concerned that it is sales tax which really is regressive and I am concerned that if something inadequate is passed then we won’t be able to fix it.

    Not sure how I’ll vote on it.

  4. Just to play devil’s advocate here for one minute – and NOT saying I agree with this – but is it possible that any discussion of a revenue ballot initiative less than 12 months after the “GOP wave” is just not going to resonate? Not because the need is not there, or even support – just because of lingering fear of what happened last November?

    I wonder if people’s perceptions of the problem have migrated past the propaganda of the last two years. And I’m not saying I have the answers.

    1. That is definitely NOT the reason, please stop intruding on this funeral for the American Freeloading Dream with any talk of reality, electoral ass kickings, etc. I, for one, would be happy if Democrats pretended that the 2010 election never happened. Stay out of touch for at least another year and eight months.

      I admire this one. He’s almost lucid.

  5. If only because there are kids in schools getting a subpar education while we figure out how to sell basic stuff that should be common sense in a civilized country, like “We actually have to fund schools even if that means millionaires pay almost as much in taxes as their middle-income executive assistants” and “maybe spending millions of dollars to put nonviolent people in prison is a bit stupid.” Those kids don’t have time to wait for a better proposal.

    I just hope the debate over Heath’s proposal doesn’t stop progressives from working on a more long term solution that includes fundamental updating of our budgetary priorities. Taking care of kids, veterans, seniors, families, and pregnant women should not come after paying for bull semen tax exemptions, private prison subsidies, and enforcement of unreasonable restrictions on the operation of mom and pop businesses.

    1. It could set progressives back more than if nothing appeared on the ballot this year. If it succeeds, the voters might think this Band-Aid solution is all they have to do, and it isn’t.

      This will keep me up nights before it’s over.

      2. …But on the other hand, that doesn’t mitigate the damage done by doing nothing. This might not pass; if it doesn’t but the margin is narrow, hopefully it’ll make politicians work together on an even better proposal next time, by showing that voters are willing to support taxation if it’s presented right. If it goes through, that (like Referendum C) can be cited as an example of successfully selling a tax increase to voters.

        Progressives get tripped up by their own perfectionism–an admirable trait in other ways–too often. No single payer? Then don’t support health care reform at all! (and let the conservatives control the conversation about what DOES pass entirely) Revenue proposal imperfect? Send it down in flames (and let the Tea Party crowd claim it went down because everyone hates the government just like them).

        I might change my mind as we see more estimates of this proposal’s impact, but my initial reaction is to be on the side of doing something, if only because I have seen a whole lot of nothing result from waiting around for better circumstances. How many things were Dems going to do “When we have the House,” that turned into “When we have the House AND Senate,” then “When we have the House, Senate, and Governor/President,” that then didn’t get done because as soon as we had all those things, we were too busy watching our backs?

        2. Neither of these proposals get out of the forties.

          Initiatives always lose support as election day nears. Unless you can show support at or above sixty (maybe 70%+ soon), you have approximately no chance or attracting any serious money to support you.

          Combine that with the willingness of opponents to raise millions of dollars, and this whole conversation is a waste of time. How about — GASP — learning to live with what the taxpayers are willing to afford you?

          1. to give more money. So if it passes — GASP — it would be what they are willing to afford… ourselves. No hurt in asking, right? Democracy!

            Could you please source where Ref C ever polled at +70%? The first poll I can find is from August and it was winning 43% to 42%.

            Thanks!

  7. Rich Guy is happy to keep the “flat tax” rate at 4.63% which is paid by all CO taxpayers.  Of course, with my various deductions from CO taxable income for things like the exclusion of gain on the sale of my Aspen second home, and tuition contributions for my Yale-bound offspring, I don’t really pay that 4.63%, either.

    Rich Guys continue to be protected, and all is right with the world!

    Tan and Happy,

    Rich Guy

    (posting today from my Hawaiian villa.  Mahalo!)

    1. Employs ten other guys, but because you raise his taxes he can only employ seven, is that what you say to the other three? You’re the cost of social justice or something?

      You’re playing with people’s lives and livelihoods, the people who create the wealth government depends on their cut of! No one serious about convincing reasonable people would talk like that.

      1. Since taxes over the last 10 years have been at the lowest rates since the 50s, we are awash in jobs and tax revenue!  By reducing taxes on the richest, we have a flourishing economy with jobs for everyone who wants to work!  And the state government has given TABOR refunds every year because there is plenty of money for K-12 AND higher education.  In fact, tuition has gone down every year because the low low tax rates have created so much additional revenue!

        There you go, AGOP.  Do I win the extra special “I Have My Head Up My Ass … And I LIKE It” Award now?

      2. Raising my taxes are in my self interest. Because the success of my company depends on being able to hire very smart well educated people. Our biggest limiting factor over the past 9 months has been that we can’t find qualified people for all of our job openings.

        Raise my taxes and give me a larger pool of qualified candidates for job openings and I’ll make more money by the end of the year. It’s not the percentage, it’s the total dollars.

        Someday if you ever create a growing company, then you’ll understand how inane you presently sound.

      3. Okay.  Let’s run the numbers.

        Say I hire ten guys who generate $100,000 per person.  I pay them $50,000, leaving me with a nice $500,000 net income.

        Today, I pay 5% to CO on that $500,000 which is $25,000.  Say the tax proposal was to increase my tax rate to 9%.  I’d have to pay $20,000 more in taxes to CO, or $45,000.  (Oh! The Humanity!!)  I’d be left with $455,000 after CO taxes.

        Your solution would be to lay off three guys, thereby reducing my gross revenue by $300,000 and my net income by $150,000.  So, now I only make $350,000.  I’d be left with only $332,500 at current rates, or $318,500 at the higher rates.

        So, GOP doctrine apparently likes me having over $136,000 LESS money in my pocket after paying the evil government.  

        You sir, and your party, are what keep Rich Guys like me laughing all the way to the hot tub.

        Aloha, dummy.

      4. A salary is counted as a business expense.

        You are not taxed on your business expenses.

        What they mean to say is “I can’t keep as much of the profit I made!”

  8. They’ll also fight anything even slightly similar to Heath’s proposal.

    Our understanding is that business interests are less inclined to fight Sen. Heath’s proposal, as it’s much better for the bottom line of high income earners–but we haven’t heard if they plan to support it, either.

    Their “understood” silence on support is a threat/ploy. It’s not in their predatory nature to allow this. Instead of raising “millions” to fight Heath’s plan, they’ll just raise and spend fewer millions.

    1. The state needs more revenue and they know it.  By their own statement, they are opposed to a “graduated tax.”

      If they don’t fund the tea party opposition to Heath’s moderate flat tax proposal, the tea party in Colorado Blue becomes even more marginalized than they are now.

      We then can concentrate on the ground game in the November off-year relection.

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