With tax season under way, it seems only fair to scrutinize how many pennies I will have left in my pocket after paying Uncle Sam. Am I paying too much? Better yet, are you?
For the most part, I don’t mind paying taxes so long as they are within reason and I’m not paying more than my fair share. After all, taxes are a necessary part of social responsibility. By each contributing a portion of our hard-earned money to a larger honey pot, we can have the tools necessary for society to function. I’m OK with this, and you should be, too.
But what really creams my corn at tax time is when corporate conglomerates or uber wealthy individuals pay less in taxes than I do. It’s just plain wrong, which is why I’m particularly peeved to learn that our multimillionaire governor still wants to reduce the state’s income tax, even as the wealth disparity continues to grow.
It should come as no surprise that Gov. Polis wants to reduce and ultimately eliminate the state income tax. For starters, he’s not exactly been shy about his goal, although he has failed to have any success in doing so as of yet; it’s Republicans that have succeeded in reducing the income tax rates during Polis’ time in office, not him. Also, Polis has long sought to leverage tax loopholes to dodge paying his fair share in federal taxes.
According to an investigative report by ProPublica, Polis paid zero federal income taxes in 2013, 2014 and 2015. Between the years 2010 to 2018, Polis’ overall tax rate was roughly half of what a constituent making $45,000 would pay, a figure that should make the blood of most Coloradans boil. Given Polis’ lousy track record of participating in the annual social tradition and responsibility that most of us do, why wouldn’t he want to eliminate his state tax burdens, too?
If the idea of joining Polis in lowering your income taxes sounds tempting, I assure you this invitation is a wolf in sheep’s clothing. A progressive income tax is one of many tools we have to help recalibrate the growing wealth disparity, and unless you are one of the super rich, any amount of savings that you think you stand to gain will almost certainly be lost overall.
Particularly interesting about Polis’ statements on despising the income tax are his claims that most economists agree with him. Having never seen any data to support this position, I was curious how local economists felt about the governor’s statement.
“I think it’s safe to say that the governor is wrong in making that claim,” replied Professor George DeMartino, an international economics expert at the University of Denver. “Income taxes can and should be part of a menu of taxes that raise government revenues equitably. Many of the alternatives, like broad reliance on sales taxes, are regressive, with low-income individuals bearing a higher share of the burden than high-income individuals. Progressive income taxes place a higher burden on those who can most afford it.”
Unlike Polis, DeMartino offered me citations to multiple data-based reports to support his position. Indeed, according to one 2020 survey, prominent economists agree that increasing federal income taxes on America’s top earners would help reduce the fiscal deficit without styming economic growth.
Chris Stiffler, a senior economist at the Colorado Fiscal Institute, also offered his expert opinion.
“Saying ‘most economists don’t like income taxes’ is like saying ‘most kids don’t like medicine,’” Stiffler replied. “We all know that medicine has long-term health benefits; so you can’t just focus on the bitter taste of the pill. In the same way, income taxes make schools, roads, health care, and other public services that make our neighborhoods thrive. I think most economists believe in a balanced tax revenue system that relies on sales, property and income taxes.”
Stiffler went on to point out how in Colorado we already rely on multiple regressive taxes and fees, far more so than in other states, which further supports keeping a progressive income tax.
Multiple local groups have joined together in asking the governor and state legislature to more fairly consider affordability in our state. Under the name Together We Thrive, the group is pushing for a Colorado that works for everyone, not only a wealthy few; a proposal that includes a more fair and equitable tax structure.
An op-ed with shared suggestions of values state lawmakers should consider for taxes and affordability was also penned by Bell Policy Center president Scott Wasserman.
When asking Americans at large, it appears that overall we also agree with progressively taxing the rich via increased income taxes. In 2021, a Harvard CAPS-Harris poll found that two thirds of Americans supported raising income taxes on individuals making more than $400,000 per year. In 2022, an updated Gallup poll confirmed a majority of Americans agree with redistributing wealth via heavy taxes on the rich.
This finding is particularly interesting as Coloradans recently voted to support Republican efforts to reduce state income tax rates, suggesting this victory may actually be at odds with voters’ underlying values of a desire to more heavily tax the rich. This means that if Colorado wants to get serious about addressing affordability and inequity, then efforts to better educate voters on how a progressively tiered income tax is part of that equation is likely to be helpful.
No one wants to pay more in taxes than is necessary, myself included. But if data and experts aren’t enough to convince you of the value of a progressive income tax that more heavily taxes the wealthy, then perhaps consider that it’s not a coincidence that a centimillionaire governor who has repeatedly dodged his own taxes is helping to lead the charge in reducing them.
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