Democrats, Republicans and the governor all want to change Colorado’s income tax.
The problem is, they have three different ideas about what that change should look like.
Gov. Jared Polis wants a permanent cut in the state’s existing flat tax, but he wants to compensate for the revenue loss by eliminating unspecified tax breaks. Republicans want a permanent cut without ending tax breaks. And Democratic lawmakers, who control both the state House and Senate, are more interested in progressive taxation, in which people who make more money pay a higher percentage of their income.
“An across-the-board tax cut is a nonstarter for me,” said state Sen. Dominick Moreno, a Commerce City Democrat and the state’s No. 2 ranking budget writer.
“That’s what (Polis) wants, and he can continue to ask all he wants for it, but the legislature — we determine tax policy. I understand the governor wants it, but it’s a nonstarter for me and, I think, for many of my colleagues.”
The tangle of policy ideas doesn’t mean Colorado’s income tax won’t change in the near future. In fact, it could change in any of a few different directions — but voters, not lawmakers, might be the ones to decide the course.
Polis’ tax plan
Polis, in his second year as governor, continues to push an across-the-board cut of Colorado’s 4.63% flat state income tax rate — a policy proposal he campaigned on in 2018, and which he now says he wants done by the end of his first term.
There are currently about 200 different tax credits, exemptions and deductions in Colorado, and the governor believes that some should be eliminated to compensate for the hundreds of millions in lost annual income tax revenue from an across-the-board cut.
The Post reached out to the governor’s office to ask which specific credits, exemptions and deductions Polis wants to scrap. Spokesman Conor Cahill said the governor plans to convene a study group to consider that question.