The governor and progressive Democrats that dominate the state legislature and every statewide office in Colorado have been masterful ― if not ethical and honest ― in devising devious schemes to circumvent the TABOR amendment in the Colorado Constitution. That’s the Taxpayer’s Bill of Rights, passed by a 1992 voter-initiated ballot measure that bypassed the legislature. It limited government spending and barred the legislature from increasing taxes or imposing new ones without the consent of the voters. Democrats have always despised TABOR.
Their favorite ploys have included misrepresenting taxes as “fees” and funding spending programs through tax credits. Because those credits reduce government revenues, they’re the equivalent of government spending but isn’t accounted for as such.
Four Big Ugly Bills
Now, the Democrats’ legislative super majority has presented a package of four bills championed by its Communist Coalition, the likes of Emily Sirota, Lorena Garcia, Mike Weissman, Julie Gonzales, and others. The bills “decouple” Colorado’s tax code from the federal government’s to “rebalance” Colorado’s tax code. Translating that into forthright language, “decouple” means denying tax deductions to businesses that the federal government allows. “Rebalance” means sharply inflating taxes and government spending.
This wording is too clever by half to have come from the progressive nitwits that run the legislature. The fingerprints of the Colorado Fiscal Institute (CFI), who “helped” write the bills are all over it. CFI spokeswoman and policy manager Caroline Nutter is stumping for these bills. CFI is the local affiliate of the State Priorities Partnership, a nationwide network of radical progressive policy groups that call for large-scale redistribution of income and social justice legislation. Nutter’s endorsement is not a plus; it’s a red flag warning. CFI has partnered with the left-wing Bell Policy Center, another local brain-trust for socialist Democrats, working to pass these bills as well as a ballot initiative to replace Colorado’s flat income tax with a soak-the rich graduated income tax.
The bills target Colorado businesses and President Trump’s One Big Beautiful Bill (OBBB) which averted huge tax increases for individuals and businesses, replacing that with tax relief. Instead, Colorado will get Four Big Ugly Bills (FBUB).
End-run around TABOR
To make income-tax filing simpler for individuals, Colorado transfers your federal adjusted gross income onto your Colorado tax return, thereby passing federal tax deductions directly onto your Colorado tax return, lowering your tax bill. One of the FBUBs would ditch this principle and brazenly disallow businesses numerous federal tax deductions, thus raising their taxes. This scheme circumvents TABOR’s ban on tax-rate increases and enables the Democrats to disallow deductions, giving them a back-door tax increase.
Such as this one: A FBUB end-run around TABOR is baring businesses from treating the salaries of high-paid executives as an operating expense, thereby raising a company’s tax bill. Government mandates minimum wages but has no power over salary maximums. That is up to stockholders, directors, and managers.
One more: Another FBUB disallows the deduction for interest expenses on debt for large corporations. That’s nuts, this is a legitimate expense. Yet others would limit the full deduction of carried-forward operating losses for established businesses and deny early-stage start-up enterprises tax deductions for losses that could help them survive. This kind of stuff is so idiotic only a socialist could dream it up. There’s no logic behind it; it’s just a desperate tax grab to enable tax-crazy Democrats to continue their budget busting, out-of-control spending spree.
Palantir Technologies, an artificial intelligence (AI) giant and Colorado’s biggest corporation by market capitalization came here in 2020 to escape California’s culture, anti-business taxes, and regulations. CEO Alex Karp has announced Palantir is relocating to Florida to escape the same problems in Colorado, which include the over-regulating of AI.
In response, the local president of the militant Service Employees International Union, declared, “Good riddance!” This mentality is self-destructive insanity. Colorado’s reputation as a business-friendly state is down the toilet. Many more companies will follow Palantir’s lead, costing Colorado jobs and tax revenue. Progressive Democrat policy like FBUB is economically suicidal, as the flight of businesses and upper income taxpayers from New York, California, and Illinois has demonstrated.
Driving out producers and coddling criminals, illegal aliens, and freeloaders is a bad formula for Colorado’s future.
The uninterrupted string of Democrat governors over the past 20 years has stacked the state Supreme Court with progressive justices who’ve blessed the Democrats’ deceitful tactics that violate TABOR’s limitations on taxation and spending without the consent of voters. This latest FBUB overreach is so blatantly unconstitutional under TABOR, it might be too much even for the Colorado Supremes. We can hope.
Longtime KOA radio talk host and columnist for the Denver Post and Rocky Mountain News Mike Rosen now writes for Complete Colorado.
Good job. Colorado dems socialist thinking only works until the money runs out then they break the state economy with higher taxes. This chases out the companies that are providing the state with revenue. We are now at this point in time. Proof that with super majorities in state legislatures there is no compromise and the bills continue to get more absurd and expensive. A legitimate legislative group cuts spending instead of raising taxes and creates incentives to bring in more revenue. Colorado is doing the opposite.
Colorado was fine before Palantir Technologies got here. Running to Florida may allow individuals to avoid state income taxes, but corporations there pay a 5% income tax, that’s more than they would pay in Colorado. If you read HB26-1221, you’ll see that it closes loopholes that have allowed big corporations to deduct salaries paid to out-of-state executives from Colorado income. Everyone should pay their fair share. The Regan-era policies that lightened the load for the wealthy and big corporations by shifting the burden to the middle and lower classes have created the messes that we find ourselves in today. What’s wrong with having big corporations and wealthy individuals pay their fair share of taxes so that we don’t have to dodge potholes on our way to work?
Spot on Mike!! Never can get a liberal to explain what is the “Fair Share”