Will CO follow CA and increase taxes?

Will CO follow CA and increase taxes?

colorado greetings stampGov. Jerry Brown has set himself and California up as a new national model. Ten days ago he told a conference of the Center for American Progress:

Three years ago California was called a failed state. They were virtually chortling in the conservative venues. The people themselves through the initiative [the Proposition 30 tax increase of $7 billion] actually broke a decade of dysfunction and laid the foundation for a government that works.

One place following his lead is Colorado, where tomorrow voters decide the fate of a $1 billion tax increase — adjusted for population, about the same amount as Prop. 30. Amendment 66 was put on the ballot by Gov. John Hickenlooper, a Brown clone.

As in California, the tax increase is being touted as going to education. But Hickenlooper recently admitted that the money actually could end up not going to classrooms, but to the state pension fund, called PERA, for Public Employees Retirement Association.

Same thing in California. After Prop. 30 passed a year ago and taxes went up $7 billion a year, in December 2012 the California Teachers’ Retirement Association announced it needed $4.5 billion a more a year from the general fund to stay solvent. That money was not included in the fiscal 2013-14 state budget that Brown signed last June. But the money still has to be paid — and is accumulating interest.

I’m just guessing, but I think the tax will lose in Colorado. Although a lot of Californians have escaped our high taxes to move there, ironically they have pushed the Rocky Mountain State to the Left. But this isn’t 2012, when President Obama and the national Democratic machine sent so many more people to the polls. It’s an off-year election, when older, more conservative voters hold more sway because others don’t bother to vote.


Also, numerous studies show the tax increase would hurt Colorado’s economy. According to an analysis by the Tax Foundation:

There is very good evidence that taxes and economic growth are negatively related, contrary to arguments claiming that higher taxes will not be a detriment to state economies.[14] We recently completed a literature review encompassing 26 academic studies related to economic growth and taxation—23 of those found that higher taxes were associated with lower growth.[15] There may not be a unanimous consensus on the taxes versus economic growth debate, but the claim that taxes in general have “little influence” on state economies is false.[16] Tax increases leave less money in the pockets of small businesses, entrepreneurs, and consumers—money that could be invested back into the Colorado economy, further propelling the state’s economic recovery forward, or that can cover basic expenses for low-income households.

Even proponents of Amendment 66 argue that “[w]hen Colorado’s income growth drops, it’s because there is a national recession.”[17] Though the recession officially ended at the close of 2009,[18] Americans are still feeling the effects. A poll conducted by the Pew Research Center in early September found that “a majority of Americans (63 percent) say the nation’s economic system is no more secure today than it was before the 2008 market crash.”[19]

And a key factor is that Prop. 30 mainly taxed “millionaires” — which in California lingo means anyone making $250,000 or more a year. But Amendment 66 would tax everybody hard:

Amendment 66 increases taxes on all Colorado taxpayers—including the poor and the middle class. While some taxpayers in higher-income ranges will see a 27 percent increase in maximum rate, even the lowest-income Coloradans will see a tax rate increase of 8 percent. In particular, individuals with incomes below $75,000 would face a 5.0 percent rate, rather than the current 4.63 percent (an 8 percent increase).

The Air Force Academy might be located in Colorado Springs, but it’s unlikely Coloradans will follow Gov. Moonboom in sending tax rates into the stratosphere.


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  1. Ulysses Uhaul
    Ulysses Uhaul 4 November, 2013, 21:44

    Colorado is conflicted…….full of aging asset rich rednecks and their brain washed, dumbed down, liberal, latte sipping spawn trying to coexist in a State known for rugged individualists.

    Reply this comment
  2. Rex the Wonderdog!
    Rex the Wonderdog! 4 November, 2013, 23:40

    “…and laid the foundation for a government that works.

    This is so laughable I am crying////////

    Reply this comment
  3. Sean Morham
    Sean Morham 5 November, 2013, 10:16

    Took a vacation day a couple weeks back, saw a retired state police employee( a few flicks of gray), nice sweater, slacks. He is around 50. recall he was getting subsidized van expense for his commute to Sacramento. I am sure for him, this is a gov t that works well so does not have to.

    Reply this comment
  4. Jonah Kyle
    Jonah Kyle 5 November, 2013, 22:54

    The projected 7 billion dollars that was supposed to be generated by Calif Prop 30 never materialized. In fact, the projected amount was only 2.1 billion, mainly because most of the people it would have affected chose to defer their income and residences to other states. It is estimated that 43% of all individuals affected did not pay, either through leaving state or simply not declaring a high enough income to meet expected revenues.

    The Laffer Curve is in full swing here. But no fears: California is now going to attempt to become the first state to establish a WEALTH (asset-based) tax on non-California real estate property (including out of state property and non all assets not considered property). 2014 is going to be the year that California eliminates capitalism.

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