DENVER–The Denver Post’s editorial board has come out against Amendment 87, the proposed graduated income tax ballot measure. In an Oct. 11 editorial, the board argued that extracting $2.7 billion in a single year from the state’s largest businesses would “do more harm than good.”
While the board took exception to some opponents’ claims, such as the measure’s impact on businesses under $500,000 in taxable profit and on deductions for seniors and veterans, it concluded that the risk to Colorado’s largest employers outweighs the benefits.
Citing conversations with Gov. Jared Polis and Denver Metro Chamber of Commerce president J.J. Ament, the board says major companies have warned they could leave if the measure passes. It adds that firms with at least $3 million in taxable profit would see their tax bills nearly double. The editorial notes that Colorado’s Fortune 500 headquarters have fallen from ten in 2023 to seven. Two of those companies dropped off the list, and QVC moved to Pennsylvania. Because large employers pay good salaries along with property and sales taxes, the board argues, losing even one would hit the state hard.
The board grants that most of the new corporate revenue would come from out-of-state companies taxed on their Colorado sales, citing a forecast done for the measure’s backers. But it says companies without in-state sales, such as defense contractors, could simply relocate to a lower-tax state like Texas, and Colorado, which ranks 33rd in the Tax Foundation’s competitiveness index, could slip further.
The board also raised concerns about how the money would be handled. New revenue would go into a dedicated fund, so lawmakers couldn’t use it to cover existing obligations in a recession, but the board worries it could seed costly new programs like “universal childcare or healthcare.”
Urging voters to “say no to Amendment 87” stands out coming from an editorial board that generally leans well to the left, and the ‘no’ endorsement reads less like a defense of the status quo than a reluctant acceptance of it.
The board writes that “Colorado’s government now is funded on the backs of the middle class” and laments “tax deductions and loopholes” available mostly to the wealthy to lower their effective tax rate. State figures, however, complicate that picture. Department of Revenue data for 2020 show Colorado filers at every income level actually paid well under the statutory rate in state income tax, with effective rates generally rising with income.
Still, the board decides that keeping the flat tax, unfair as it sees it, does less damage than driving away major employers and the jobs they provide.
“For now, Colorado would be wise to accept that we are able to moderately tax companies at 4.4%,” the editorial concludes.
The full editorial is available here.
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