9:57 am - Sunday September 24, 2017

Heavy Colorado Tax Burden‏

Colorado has been ranked fifth in the nation for low tax
rates, but a new report says low- and middle-income earners in the
state shoulder almost twice the tax burden in terms of income share,
compared with that of wealthy residents.

According to Ali Mickelson, a tax policy attorney for the Colorado
Fiscal Institute, that disparity becomes clear when the percentage of
income that goes to paying all taxes – including property and sales,
as well as state and local income taxes – is considered.

“You look at low-income earners are paying just over 8 percent of
their total earnings in taxes, whereas high-income earners are paying
just over 4 percent. So the difference is really almost half.”

Coloradans often pride themselves on living in a “low tax” state, she
said, but the new report examines who is benefiting the most from low
tax rates.

“This report shows that while we are low-tax overall, when you combine
state and local taxes, the lowest taxes are going to the rich, and not
to our lowest-income and middle-income families. I think that people
are starting to recognize that.”

Measures are under consideration that would make Colorado’s tax
structure more progressive, she said, so that the wealthy would pay a
more “fair share” of the tax burden. Lawmakers are debating Senate
Bill 1, which deals with inequity in Colorado’s tax structure.

“There is a bill moving that would inject some progressivity into our
system, by adding an Earned Income Tax and a Child Tax Credit,”
Mickelson said. “That would be a great way to begin to combat some of
this inequality in the tax system.”

The fourth edition of the report, “Who Pays? A Distributional Analysis
of the Tax Systems in All 50 States,” is online at www.whopays.org

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