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DENVER (KDVR) — A coalition of progressive groups is taking the first steps of getting a question on the 2026 ballot, asking voters if the state should have a graduated income tax, meaning higher earners would be taxed at a higher income tax rate.
Supporters of the proposal believe it’s a way the state can generate some revenue, but opponents worry it may scare off people who have the most money to spend.
“Coloradans have been tuned in to the growth of wealth among the very wealthy for a long time,” Chris deGruy Kennedy of the Bell Policy Center. “So I think they understand that the economic inequality and the way that all of the wealth is going to the very top is a huge problem for our country.”
Former state representative Chris deGruy Kennedy now leads the Bell Policy Center, a progressive think tank. They are speer heading a new effort backed by dozens of organizations in the front range to put a graduated income tax proposal on the 2026 ballot. The new effort comes after voters lowered the flat income tax rate for everyone in 2020 and 2022.
“That was not a huge problem in the short-term because we had large tabor surpluses so all that did was reduce the tabor refunds that people received. Now that the federal government blew a $1.2 billion hole in the state budget, those cuts to the income tax rate from a few years ago are meaning we are cutting deeper into education, healthcare and a lot of other things that people depend upon,” said deGruy Kennedy.
The new proposal seeks to drop the rate to 4.2% on the first $100,000 of taxable income. It would leave the 4.4% rate intact for taxable income between $100,000 and $500,000. Those rates would continue to increase for each tax bracket up to a 9.5% rate for people and businesses making over a million dollars a year, as follows:
- 4.2% for $0-$100,000
- 4.4% for $100,001-$500,000
- 7.5% for $500,001-$750,000
- 8.5% for $750,001-$1,000,000
- 9.5% for more than $1,000,000
Opponents like Michael Fields of conservative think tank Advance Colorado believe businesses will flee the state if they see a tax increase. The group is moving forward with their own measures to lower the income tax rate for everyone.
“Chasing revenue that might leave and go somewhere else is a bad idea for Colorado,” said Fields.
“We have a couple of measures put there. We haven’t settled on a number yet. We have everything from 3.4% to 4.2%. So it could be anywhere in that range. Obviously, we are still going through title board, we’re seeing what language we get, we’re seeing what numbers. We have a little bit a time before next year,” said Fields.
These ballot initiatives would be on the 2026 ballot once they complete the process.
The graduated income tax measure was just filed on Wednesday morning. Twenty-seven other states in the U.S. have graduated income taxes. Supporters say the proposal in Colorado would raise more than $2 billion in revenue.
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Gabrielle Franklin
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