Point: Ben Murrey

The beauty of Proposition 116 lies in its simplicity: It will decrease taxes for Colorado taxpayers. Period.

That’s why shortly after the measure got approval for the November ballot, Gov. Jared Polis praised the idea of a tax cut, saying, “We’ve long sought an income tax decrease [and] particularly in this challenging time, I think Coloradans certainly need tax relief.”

He’s right, and there are countless reasons why now is the time for a modest 0.08% cut in the state’s income tax rate, though opponents might entice you to think otherwise. The only downside to the measure is that it won’t even come close to offsetting the new taxes Coloradans are paying without having consented.

For starters, the 2017 Trump cut to federal taxes caused state taxes to increase, which Colorado voters did not approve. This happened because changes to federal tax law in 2017 affected the way Colorado calculates your state tax liability. In fiscal year 2021-22, the state will collect nearly four times more revenue from the Trump tax windfall than it would lose from the proposed tax cut in Proposition 116, according to the latest available estimates.

To offset this increase, the state Legislature would need to lower state tax rates. Sen. Jerry Sonnenberg introduced legislation to do this, but the bill never made it through the legislature. Proposition 116 gives voters the chance to recover a small portion of the additional state taxes taken from them without their say.

Enter COVID-19. Now more than ever, Coloradans need a lifeline. Rather than providing real relief to struggling families and businesses, however, the state Legislature simply handed out federal CARES Act dollars and then patted themselves on the back. In fact, one bill, HB 1420, robbed struggling businesses of several tax relief provisions granted under CARES.

Simply put, Proposition 116 gives voters the power to provide themselves with the relief that the General Assembly refused to deliver.

Of course, opponents will say that a tax cut would be irresponsible given the state’s budget shortfall. Nonsense. In this legislative session, from two bills alone, the Legislature created over $450 million in new state revenues without voter approval. According to the Legislature’s analysis, that’s $100 million more than the cost of the proposed tax cut.

In addition, outside analysis by the nonpartisan Common Sense Institute estimates that the tax cut would grow the state economy by about $200 million if adopted. Instead of causing a budget crisis, a vote for Proposition 116 will create jobs and economic opportunity while helping to offset some of the new taxes the Legislature does not let you vote on.

In spite of support from Gov. Polis, some might try to convince you that this is just a tax cut for the rich. Their evidence is that we can’t cut taxes for people who pay no taxes — generally lower-income earners — therefore we shouldn’t lower taxes for anyone.

Their message is that if you’re a working-class Coloradan who pays taxes then you’re “the rich” and don’t deserve a tax cut. Or alternatively, you should vote against a tax cut for yourself because someone who pays more in taxes will save even more money from the cut.

The simple truth is, this is a mild but much needed tax cut for all taxpayers.

Gov. Polis gets that, but many politicians believe they should be able to dip into your pockets without your permission because they know how to spend your money better than you.

I suspect Coloradans will have a different take come Nov. 3.

Counter: Scott Wasserman

Here in Colorado, it’s getting more and more frustrating to see the games political groups play with our ballot initiative process. It’s even more frustrating that our state never seems to have the resources it needs to deliver the kinds of services we want or need. When we look at Proposition 116, a proposed tax cut on the 2020 ballot, we need to ask a simple question: Who wins if this passes? Unless you are among the top 3% of earners, the answer is not you.

By cutting our income tax rate from 4.63% to 4.55%, an average Colorado taxpayer will see a $40 savings in their state tax bill while those who make $1 million will see $800 in tax breaks. In fact, out of the $154 million it will cost us to pay for this tax cut next year, 55% of it will go back to the wealthiest 3% of residents in our state. If a millionaire gets $800, just imagine how much a billionaire will get back.

If Proposition 116 passes, our elected legislators — who have slashed 25% from our budget due to the COVID-19 recession and must make similar levels of cuts next year — will have to figure out how to cut an additional $154 million from the things we all rely on. While this amount might sound small in the context of a multibillion dollar budget, their options will add insult to injury for many of us. The additional amount they’ll need to cut is the same amount as it costs to pay for the Senior Homestead Exemption, a property tax relief program that helps many older Coloradans stay in their homes. It’s two-thirds of what it costs us to provide full-day kindergarten. It’s more than what Colorado Springs District 11 receives. It’s more than enough to pay for a consistent stream of road projects, like the widening of I-25. These funding priorities were hotly debated and barely survived the chopping block last year.

In the scenarios, our representatives choose if this measure passes, the lives of Coloradans — be they older adults, commuters, or children — will be disrupted and likely made more expensive than they are now. And for what? So our tax code can be even more unfair than it is today and billionaires can reap bigger benefits we agree they don’t need? So the people who need the most relief in this tumultuous time get the least?

We know there is a bigger debate we must have about whether Colorado’s tax system is meeting our values and aspirations as a state. This is not that debate.

Instead, this is a blind grab from our biggest area of public need to the benefit of our wealthiest residents for the purpose of scoring political points. Why else would you propose a tax cut, not say how you’ll pay for it, and force our elected leaders to make even more painful choices than they already have to? Our recovery from this economic crisis depends on us investing in one another, not 97% of us helping the wealthiest in our state grow their stock portfolios.

The backers of Proposition 116 are playing a very cynical game, believing the best way to shrink our government is to convince us that $40 more dollars in our pockets is better than having schools, roads, and other services we can be proud of. As voters, we have the power to say enough is enough. The wealthiest among us shouldn’t be getting a big tax cut at the expense of the community investments we count on.

Ben Murrey serves as Independence Institute’s Director of the Fiscal Policy Center, working to promote fiscal policy in the state of Colorado centered on the principles of limited government, the free market, and the liberty of individuals and families. Scott Wasserman has 20 years of experience working on Colorado’s public policy issues and is president of the Bell Policy Center.

Ben Murrey

Scott Wasserman