Colorado voters face dueling income tax measures that could reshape the state's finances

In less than four weeks, Colorado voters will decide the future of how their state taxes income, with two directly competing measures on the November 3 ballot.

Amendment 87 would scrap the flat 4.4 percent income tax and replace it with six brackets ranging from 3.7 to 8.4 percent starting in 2027. The first $25,000 of taxable income would be taxed at 3.7 percent, income from $25,001 to $100,000 at 4.2 percent, income from $100,001 to $500,000 at 4.4 percent, and income over $1 million at 8.4 percent, a 91 percent jump in the top rate. The measure would raise an estimated $2.7 billion a year for public schools, health care and early child care. It would also amend the Taxpayer's Bill of Rights to remove the constitutional requirement that all taxable income be taxed at one rate and let the state keep the new revenue outside TABOR's normal spending cap.

Proposition 136 does the opposite: it would write the current 4.4 percent flat rate into state law as the maximum any Coloradan or Colorado business can ever pay. If both measures pass, the one with more votes controls the conflicting provisions, though the state's official ballot guide notes a court or the legislature may have to sort out the overlap.

Supporters of Amendment 87, backed by the Protect Colorado's Future coalition, say it cuts taxes for most residents and raises them only on the top 3 percent of earners and 5 percent of businesses, the people and companies that benefited most from recent federal tax cuts. Opponents, including Americans for Tax Reform, call it a nearly $2 billion tax hike that destroys the simplicity of the flat tax and guts TABOR, the 1992 constitutional amendment that caps state revenue growth and requires refunds of the surplus.

The flat tax itself dates to 1987, with the current 4.4 percent rate set in 2022. A last minute lawsuit tried to knock Amendment 87 off the ballot and failed. A third tax question, Proposition NN, would let the state keep money it would otherwise refund to taxpayers, as lawmakers stare at a projected $1.6 billion budget shortfall.

Whatever wins will define how Colorado pays for government for a generation.