Friday, October 22, 2021

Doing Away With Colorados Income Tax?

 The Independence Institute is now promoting the idea of eliminating Colorados income tax, which is currently a flat rate of 4.5%. This is a modest rate nationally, and works out well as it's easy to calculate.

The other side of this argument is that states without an income tax somehow are more successful than states with one. Texas and Florida, for example, have no income tax. Nice, but they are also run by Republicans, which in the grand scheme of things seems to be a better indicator of a states success than the presence or absence of the income tax.

Look at one more thing here: TABOR. This feature in our constitution, says that the Colorado legislature cannot impose a tax or alter the rates of existing taxes without approval by the electorate. The legislature, and all lower lawmaking bodies know perfectly well how proposals to raise taxes fare when the public gets a voice in their imposition. The solution here is to call everything a "fee" and thus exempt it from scrutiny.

Now we all understand that governments need money. Those Trains, busses, windmills, and public housing for drug addicts don't build themselves, and all those people who don't want to work need to be supported by those who do, so we have taxes. Or fees.

Let's suppose this idea comes to fruition. The income tax revenues disappear, and must be replaced by fees. The fees will initially be modest, and will initially be insufficient, and so must be raised. Probably a lot. Of course if you find you can't afford $500/year for a license plate, you can always sell off your car and use public transportation. Harbor Freight also sells collapsible wagons which should help on your grocery store trips. Maybe RTD will update their vehicles to make getting them on and off easier. An increase in the public transit fee will pay for the upgrades which should be fully installed in no more than 5 years.

Hopefully, someone will amend the implementation to exclude motorbikes and cycles from fee increases, so the less affluent will still be able to afford to drive to whatever job they can find that are not conveniently located along a bus route. NOTE: A typical 20-30 minute commute by motor vehicle, typically takes about 1-1/2 hours by public transport. 

Not that I don't favor the idea of changing Colorados tax structure, I do. I just don't trust the people who would be in charge of making the changes.

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