There once was a countryman who possessed the most wonderful goose you can imagine, for every day when he visited the nest, the goose had laid a beautiful, glittering, golden egg.
But the countryman had spent seven years earning his four-year degree in social justice advocacy, er, the humanities, so he convinced himself that the goose was exploiting him by laying the golden eggs.
“How dare you lay golden eggs when I can lay none!” he screamed at the goose. “No justice, no eggs! Eat the geese! End geese privilege! Destroy goosist oppression!”
The goose, understanding not a word of it, clucked and laid another golden egg, further enraging the man. So the man grabbed a hatchet, lopped off the goose’s head, stuffed the goose’s carcass in the oven, and enjoyed a fine meal of goose flesh.
Then the man rowed out to the middle of a deep lake and dropped the golden eggs to the bottom, freed at last from the taint of exploitation.
Okay, that story is a little dramatic in the context of Amendment 87, the proposal to add progressive tiers to the state income tax. If you prefer imagine instead the man merely delivering punishing kicks to the goose.
But let’s not pretend that Marx-inspired hatred of the rich (that’s Karl, not Victor) is not part of the motivation behind this, nor that punishing producers will not at the margins reduce the total amount of wealth and encourage wealthier people to move elsewhere.
The most important thing to know about Amendment 87 is that it is a net tax hike of some $2 billion annually.
This is the fundamental question, then: Do you think politicians and bureaucrats can spend that money better than the people who earn it? I don’t think so. Indeed, I regard the proposition as laughable. I think government at all levels should be spending less overall, certainly not more.
Here is a stat from the Common Sense Institute: “Government spending has outpaced inflation and population growth in recent years—adjusted for inflation, total state government appropriations per Coloradan increased by 31% from FY06 to FY26, growing from $5,580 to $7,308.” That already seems like a lot!
A brief history of income taxes in Colorado
Federal income taxes, of course, entered the scene in force in 1913 with the Sixteenth Amendment. What about Colorado?
As Rob Natelson notes, Colorado’s original 1876 Constitution “authorized only one kind of statewide tax: the property tax. There were no impositions on sales, income, businesses, or anything else.”
In 1936, voters narrowly approved Measure 2 allowing the legislature to impose income and personal-property taxes. Here is the text of the measure, according to the Wray Rattler: “The General Assembly may levy income taxes, either graduated or proportional, or both graduated and proportional, for the support of the State, or any political subdivisions thereof, or for public schools, and may, in the administration of the income tax law, provide for special classification or limited taxation or the exemption of tangible and intangible personal property.”
Why did most voters support it? As the Rattler notes, “Many voters want what they were led to believe they would be given—relief from real estate and property taxes in the amount that the revenue from an income tax would provide.” Others wanted to raise additional funds for various projects.
As Earl Crockett reported in a 1951 study, the legislature quickly imposed six taxing tiers ranging from 1% to 6%. Then, in 1947, the legislature expanded the number of tiers to a dozen, topping out at 10%. Obviously voters were imprudent to give legislators an open-ended invitation to continually readjust the rates.
Crockett offers an interesting historical account of state income taxes:
The Colorado income tax was established in 1937 after a struggle among various economic groups extending over a period of twenty-five years.
The 1937 law, as finally enacted, contained very liberal exemptions and low tax rates. Consequently, the measure was a partial disappointment to those who had sponsored for so long the income-tax reform.
However, there was general agreement by members of the legislature that after a trial period the tax could and perhaps should be strengthened. Ten years later, in 1947, when the state faced financial difficulties, exemptions and rates were changed so as to make the tax more productive of revenue.
Provisions of this amendment of 1947 were made to expire December 31, 1948. However, in 1947 [apparently actually 1949], the General Assembly re-enacted the amendment, extending the features of the 1947 law until June 30, 1951. Both of these terminating dates (1948 and 1951) were placed in the income-tax amendment by members of the legislature who either believed that requirements for additional revenue were temporary only, or else were opposed in principle to the income tax.
In 1951 the legislature renewed the same rate structure. In 1960 the legislature tweaked the rates, raising the bottom rates and lowering the top ones, and this general structure remained in place through 1986.
On June 13, 1987, the Rocky Mountain News announced on its front-page top headline, “Governor, legislators agree on flat-rate tax.” As John Sanko writes, Democratic Governor Roy Romer threatened to “veto the living hell out of” House Bill 1331 if it reduced business taxes more than he wanted.
“The compromise calls for individuals to pay a flat 5% tax for the 1987 tax year,” Sanko writes, while larger businesses initially would pay as much as 6%, with a “tax phased down to 5% over a five-year period.” Sanko added, “Romer said the plan would raise an additional $40 million in revenues during the next five years.” (See also the 1987 legislative digest, p. 158.)
Then came the Taxpayer’s Bill of Rights (TABOR) in 1992. In addition to requiring voter approval for tax hikes, the language stated, “Any income tax law change after July 1, 1992 shall also require all taxable net income to be taxed at one rate, excluding refund tax credits or voter-approved tax credits, with no added tax or surcharge.”
Notably, then, a progressive or graduated income tax in Colorado requires a constitutional change.
Since then, voters have twice defeated proposals to upend the flat tax. (Note: Although we call this tax flat, because the first $16,000 or so of income is exempted, we actually have a two-tier system.)
In 2013, voters turned down Amendment 66 by a two-to-one margin. This would have created an additional tax bracket of 5.9%.
In 2018, voters turned down Amendment 73 by a seven-point margin. It would have created several tiers, topping out at 8.25%.
In 2020, a proposal aiming to increase the top bracket to 8.9% failed to reach the ballot.
In 2022, voters passed by a two-to-one margin Proposition 121, lowering the income tax rate from 4.55% to 4.4%. Notably, that year both major-party candidates for governor, Jared Polis and Heidi Ganahl, endorsed eventually eliminating income taxes altogether.
That brings us up to the current effort. The upshot is that Coloradans have been debating income taxes for over a century. The debate involves not only how taxes are collected but how much government ultimately spends.
Details of Amendment 87
As the Common Sense Institute summarizes, Amendment 87 (then Initiative 195) would create six tax brackets ranging from 3.7% to 8.4%. CSI predicts that, under the net tax hikes, “Colorado would lose some residents and businesses.” And 8.6% of zero is…let’s see here…zero.
And, as Nash Herman points out, the fact that Amendment 87’s brackets are not indexed to inflation makes it “fatally flawed.”
Punishing people for producing wealth is a great way to undermine prosperity. I agree we need some tax reforms. But Amendment 87 is envy-driven foolishness.
Ari Armstrong writes regularly for Complete Colorado and is the author of books about Ayn Rand, Harry Potter, and classical liberalism. He can be reached at ari at ariarmstrong dot com.
