Zornio: Colorado Democrats offered two ballot propositions with tax inequities. Why?

Colorado ballots have dropped, and voters are up to bat. Like the Rockies, some of us seem to keep losing.

I’ve already addressed why I think Proposition HH is exceptionally complex and unfair to voters to decide on, at least as currently written. In contrast, Proposition II is a breeze. It’s shorter, cleaner and has an obvious answer: We should support it.

That doesn’t make it perfect.

Proposition II is aimed at addressing Colorado’s surplus of nicotine and tobacco taxes. If voters pass Proposition II, the state will keep the excess $24 million collected in taxes and put it toward expanding preschool access.

If we don’t pass Proposition II, the state will be forced to return the excess $24 million to nicotine and tobacco wholesalers and distributors, and the future tax rate for nicotine and tobacco will be reduced.

Given the vote is essentially between the state giving $24 million to nicotine wholesalers or $24 million to Colorado families, the choice is a no-brainer. This is made particularly evident as there are no formalized groups against Proposition II. 

Yet conflating an easy choice as the best choice would be wrong.

Just like HH, Proposition II has tax inequity baked in. This is worth discussing, and at least one Colorado state representative has openly opined on the matter.

Democrat Stephanie Vigil voted against the bill that led to Proposition II, citing that while she would ultimately support the proposition as a citizen, her vote as a legislator was on principle. Specifically, Vigil explained that she promised her constituents she would not support increases on so-called “sin taxes” that disproportionately target low-income residents. As a former smoker herself, Vigil wanted to honor that promise.

Vigil’s moral high ground might seem performative as the bill was set to pass regardless of her support. Still, she’s right about the regressive nature of today’s cigarette tax.

Perhaps there was a time when higher nicotine taxes made sense, but that time has ended. Today, there are only an estimated 12% of Colorado residents who still smoke cigarettes regularly (note, this is separate from e-cigarettes and marijuana). Two factors above all most strongly associate with who uses them: education and income.

These factors change the discussion. For years, public health campaigns have sought to minimize the use of the harmful and addictive substances. The results have mostly been good as fewer people smoke.

But these results have also largely skewed toward those with better education, better incomes and subsequently better health care, leading to a compounding effect of health, social and economic burdens for those who remain addicted — particularly as continuing to smoke cigarettes is now heavily frowned upon by more educated and affluent groups making it more difficult to access help. 

Continuing to maintain excessively high cigarette taxes in today’s policy is a regressive tax. By placing the onus predominantly on low-income smokers, we’re no longer discouraging cigarette use, we’re taxing addictions and cheap health care. That’s not fair, and even though we should pass Proposition II, there’s no mistaking it will contribute to maintaining this inequity.

There is a silver lining: The excess $24 million collected from smokers who skew low-income would go back to low-income families via preschool assistance if we pass Proposition II. For smokers with preschool age children, this could be a big win, especially as better preschool access correlates with better long-term education outcomes, that, in turn, correlates with a higher likelihood of not smoking.

Of course, smokers without preschool age children are disproportionately funding this benefit and see little personally in return.

Most of all, some questions remain: Why would Colorado Democrats offer voters not one, but two ballot propositions steeped in tax inequity? For Proposition HH, why not extend the flattened taxes over the lifetime of the proposal, and why not include a renter’s tax credit to help balance out the benefits to homeowners?

For ProII, why not give the $24 million to preschool and slightly reduce cigarette taxes in the future?

I can’t justify any of these oversights, and the party will need to reckon with these errors as the next session approaches. After all, are Colorado Democrats a party that cares about tax equity and closing the wealth gap or not? 

Only time will tell.

Trish Zornio is a scientist, lecturer and writer who has worked at some of the nation’s top universities and hospitals. She’s an avid rock climber and was a 2020 candidate for the U.S. Senate in Colorado. Trish can be found on Twitter @trish_zornio