8:33 pm - Sunday September 24, 2017

Colorado Tax and Spend Myths Debunked

Thorough Research and Analysis Ranks Colorado Near National Average
DENVER, Colo — The Independence Institute released two reports investigating the popular conception that Colorado ranks towards the bottom when it comes to state revenue and state spending. We are told that Colorado spends too little money on important state sevices like health care, K-12 and higher education, and infrastructure. As a result, we hear Colorado does not collect enough tax revenue to support important services. The research for the Issue Papers contradicts these claims. Colorado ranks 26th in combined tax burden and claims about state spending on services are misleading, inaccurate, and politically charged.

In the Issue Paper titled, How Colorado’s Tax Burdens Rank Nationally, author Anthony Gonzalez examines Colorado’s per capita state and local tax data to evaluate our combined tax burden in relation to the other 49 states. Anthony finds that while Colorado collects relatively little in the way of state taxes, it more than makes of for it at the local level. Put differently, we rank low in state tax burden and high on local tax burden. When combined, these burdens put us square in the middle of all state tax burdens at 26th.

In the Issue Paper titled, Does Colorado Fail to Spend State Taxes on Services, author Nate Neligh debunks the myth that Colorado spends less on government services relative to the other states. The paper takes a close look at a few key spending areas: Health care, K-12 education, higher education, and total spending. Examining the claims which frequently rank government services near the bottom, Neligh finds the methodology and conclusions inadequate. Use of dubious statistical measures and ignoring sources of revenue lead to conclusions that support a political agenda. With more rigorous analysis, the research demonstrates that Colorado spending on key services conforms reasonably closely to the median revenues collected.

The Independence Institute is a non-partisan, non-profit public policy research organization based in Denver, Colo.: 727 E. 16th Ave. Denver, CO 80203 www.independenceinstitute.org

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