Merry Christmas Colorado Taxpayers!
By Ali Mickelson
It felt like Christmas morning when I opened the Colorado Department of Revenue webpage, searching eagerly for the link. After two years of waiting and several more years of effort, one click would finally lead me to important state tax information that had previously been mysterious. The new Colorado Tax Profile & Expenditure Report had finally been published and I couldn’t wait to read it. Now, in one document, I could determine how much money the state is giving up through various tax breaks, who benefits from them and how much all of this is costing Colorado each year.
I could compare the tax rates that low-income Coloradans pay to what others pay. This is important for making targeted policy decisions that benefit low-income families. I could calculate the average amount of business income deducted from Colorado tax returns by income class – another great way to determine where tax policy should be focused in the future. In short, I now had access to the tax information jackpot and I couldn’t wait to open this gift that would help me understand who pays what and what we’re getting in return.
Our organization, then known as the Colorado Fiscal Policy Institute, worked to pass the legislation in 2011 that molded and mandated this report. After months of negotiation with business leaders, legislators and the state Department of Revenue, the General Assembly passed legislation requiring publication of the Colorado Tax Profile & Expenditure Report every other year for five years. The study was paid for in part by revenues generated from a tax amnesty.
This report is an important step towards transparency and accountability in Colorado. It allows policymakers and the public to see where the state is spending money that previously was hidden in the tax code. Now we can see how that spending affects Coloradans at all income levels. We have further evidence that inequities in the state tax system exist, that low-income Coloradans pay a higher percentage of their income in taxes than the wealthiest. This report highlights tax code “winners” and “losers” in Colorado, and provides the information we all need to make sure tax policy decisions can better serve the public interest.
The Colorado Fiscal Institute is already using this information to analyze the state budget and evaluate policy choices. We will be widely sharing our findings with lawmakers and taxpayers.
Within the next few years, the legislature will vote on whether to continue to appropriate money for the Colorado Tax Profile & Expenditure Study. We hope that once lawmakers see the relevance and necessity of this key policy tool, they too will look forward to its publication as much as I did. Merry Christmas to all and to all good insight.
