February 08, 2023 12:39 PM UTC

Scott Bottoms and the Tax Cut Zombies

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• by: Colorado Pols

One of the more entertaining and enlightening moments of the 2022 election cycle in Colorado took place in September during a gubernatorial candidate forum hosted by Colorado Concern. Longtime Denver Post publisher Dean Singleton was the moderator of the event; he tried really, really hard to understand how Republican Heidi Ganahl planned to eliminate the state income tax while also avoiding MASSIVE cuts to important government services that would result from making billions of dollars in revenue just vanish.

Despite promising that she would eventually come up with a plan for her plan to eliminate the state income tax, Ganahl never did put forward anything that could have even remotely been considered a plausible path forward for eliminating the state income tax and continuing to pay for things like public education and road maintenance. As Ryan Warner of Colorado Public Radio said to Ganahl in July 2022 in response to her plans to eliminate the income tax and halve the gas tax, ““I hear you talking about growth and oversight and regulation. I don’t hear where you would get $9 billion and another $600 million in savings.”

As The Colorado Sun wrote in a separate story last July: “Conservatives have mostly avoided calls to eliminate the income tax, which has been around since 1937, because no one has presented a feasible way to do it.”

Evidently Republican State Rep. Scott “There is No” Bottoms did not get the memo on this subject (or, frankly, on any other subject). Bottoms, a freshman Republican lawmaker from Colorado Springs, is sponsoring legislation (HB23-1063) that seeks to “reduce both the individual and the corporate state income tax rates from 4.40% to 3.5%” starting on January 1, 2024.

On Tuesday, the nonpartisan Legislative Council Staff released its required Demographic/Fiscal note on Bottoms’ proposal. Here’s the Bottoms line:

This bill may increase existing income disparities by providing larger tax savings for those with higher incomes, both in absolute amounts and proportionally to income. [Pols emphasis]

Individuals who are not required to file income taxes because they have insufficient incomes and those without an income tax liability due [to] the structure of the federal and state income tax code (e.g., deductions and tax credits) will be unaffected by the change in income tax liability under the bill. Higher income earners, who tend to have a higher income tax liability, are more likely to experience income increases from tax savings under HB 23-1063.

In other words, only wealthy Coloradans (and the zombie “think tank” wizards who are paid by wealthy people) would see any real benefit from reducing Colorado’s state income tax rate from 4.40% to 3.5%. Middle- and lower-income Coloradans could end up paying more in taxes as a result.

For example, a Coloradan who is a single filer with an annual income of $52,000 or less would save about $85 per year from the reduced income tax rate. HOWEVER, the overall impact would mean a $249 reduction in TABOR refund savings for that same individual; the net result for such a person would be a $164 INCREASE in taxes owed. Meanwhile, taxpayers with incomes of more than $200,000 per year would save about $3,500 annually…a savings they might barely even notice.

There’s no pressing need to even discuss this stupid idea, but Ganahl and Bottoms are part of a generation of Republicans who were raised on a message that tax cuts are always good policy for everyone in any situation and no-one should ever question that wisdom, period. The rhetoric is part of the Reagan-era “Trickle Down Economics” theory that has been widely debunked as providing virtually no benefits for anyone who isn’t already rich.

Republicans such as Ganahl and Bottoms either A) Only care about helping rich people make more money, or B) Have no actual idea how tax and fiscal policy actually works. Or perhaps, C) Both.

Fortunately, Colorado voters have seen through these nonsense claims over the years and have elected representatives who are not solely interested in giving wealthy people a little more ‘walking around money’. This legislation, like everything else touched by Bottoms, will go nowhere in a state legislature with a Democratic majority.