Denver Gazette: YES to Proposition 121; Cuts Colorado Income Tax | Opinion
No less than Governor Jared Polis has publicly called for the elimination of Colorado’s income tax. He is of course not an anti-government rebel from the radical right. He’s a liberal Democrat from Boulder – and a very successful internet entrepreneur who knows how to create prosperity.
His challenger for re-election in the November ballot, Republican gubernatorial candidate and CU regent Heidi Ganahl, is also a successful entrepreneur who understands wealth creation and economic opportunity.
And both know that income tax hinders wage growth and job creation and hinders prosperity in general. That’s why everyone wants to eliminate Colorado’s income tax and put our state in the company of Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming.
This is also why everyone supports proposition 121 during the postal vote this fall. It will reduce the state income tax rate for individuals and corporations from 4.55% to 4.40%. An analysis by Colorado’s Common Sense Institute found that it would save taxpayers $767 million in the first year after implementation.
If polar political opposites like Polis and Ganahl can agree on this one, that makes an all the more compelling case and helps explain why the proposal is likely to pass on November 8.
He also has our vote. Vote YES on proposition 121.
Prop. 121 is much more than short-term tax relief – although that is justified in itself amid the twin turmoils of inflation and the impending recession. The measure is a chance to follow up on Colorado voters’ overwhelming support for a similar statewide ballot proposal in 2020 that lowered income tax 4.63% to its level. current 4.55%.
In this light, Proposition 121 could be seen as another step towards the total elimination of income tax.
Proposed and requested on the ballot by a crowd of grassroots volunteers and led by Jon Caldara of the Independence Institute and Republican state veteran Senator Jerry Sonnenberg of Sterling, Prop. 121 comes from the political centre-right. But he connects with politicians as well as voters from all walks of life because they see his wisdom and fairness.
Taxing income is fundamentally counterproductive. Low-wage earners struggling to make it from paycheck to paycheck need every penny they earn. Job-creating companies, meanwhile, want to operate in tax-free states, in part because their employees take home more of what they earn. This helps with recruitment, retention, and corporate overhead. The absence of corporate income tax also encourages more reinvestment in their own operations.
As Polis said, when you tax something, you penalize it – and you get less. Income tax leaves us with fewer jobs, less take home pay, less capital.
Lowering the income tax in this election and possibly even eliminating it will be a boon to state tax coffers. By making the state more attractive to new employers, the additional people will result in increased sales and property tax revenues, offsetting previous income tax revenues.
There are also many other ways to replace lost tax revenue. Income-tax-free South Dakota and Tennessee did so largely by raising taxes on cigarettes and alcohol. As long as steps are taken to exempt essential goods like groceries, sales and excise taxes are a fairer way to tax, as they give taxpayers more discretion over their own income.
Proposition 121 is one of those rare opportunities to secure both a short-term gain and an even greater long-term windfall. Vote YES.
Denver Gazette Editorial Board