The campaign to replace Colorado’s flat income tax with a progressive rate structure is hitting a roadblock.
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On June 22, 1987, Colorado became the first state in the nation to switch from a progressive income tax code to a single rate when then-Governor Roy Romer (D) signed House Bill 1331 into law. Now, nearly four decades later, a ballot campaign called Protect Colorado’s Future (PCF) seeks to return the state to a progressive income tax system.
“A coalition led by the Bell Policy Center is promoting the proposal, which is estimated to cut taxes for any individual or corporation earning less than $500,000 a year and raise them for those earning more.” famous Ed Sealover, vice chairman of the Colorado Chamber of Commerce, of the effort to put a graduated income tax initiative on the 2026 ballot. $500,000, the amount between $500,000 and $750,000, etc., but Bell calculates an effective tax rate of 4% between 4% and earning $500,000 or less and effective rates of 4.9% to 9.2% for those earning more, with the highest rate reserved for businesses and individuals making $10 million or more.”
“Colorado is at an inflection point,” Bell Policy Center President and CEO Chris deGruy Kennedy said at the May launch of the PCF Coalition’s campaign for a progressive income tax. “For more than three decades, an overturned tax code has hurt Colorado’s schools, health care, child care and environment. We’ve made the rich even richer while everyone else struggles to keep up.”
However, Kennedy and other members of the PCF coalition recently faced procedural hurdles to overcome in order to get their proposal on the ballot. PFC’s effort to place a progressive income tax measure on the 2026 ballot hit a roadblock on Oct. 15 when the Colorado Securities Definition Board unanimously ruled that PCF’s proposal violates the state’s one-person rule. “Proponents of the initiative have until April to get the board to approve a revamped, single-issue proposal, though they are likely to come back with an alternative proposal much sooner,” Sealover noted.
Moving to a progressive income tax would make Colorado a national outlier
Opponents of Colorado’s move to a graduated income tax system with higher rates point out that competing states are largely moving in the opposite direction. Over the past five years, most state legislatures have enacted income tax cuts, and the number of states with a flat income tax has nearly doubled over the past decade.
“Between 2021 and 2025, eight states are enacting laws to transition to a flat individual income tax structure while providing tax relief to taxpayers across the income spectrum,” Jared Walczak, vice president of state projects at the Tax Foundation. he explained in an Oct. 8 post about what he and others refer to as the flat tax revolution.
“Six of these fixed taxes have already been implemented, while another two are set to take effect in the future,” added Walczak. “Specifically, Arizona enacted a flat tax law in July 2021, followed by Iowa in March 2022, Mississippi and Georgia in April 2022, and Idaho in September 2022. Louisiana joined them in December 2024, followed by legislation passed in Kansas in April 20 June 2025.
“When looking at tax movement, it’s best to consider what each state’s competitors are doing,” Rob Natelson, a senior fellow in constitutional jurisprudence at the Independence Institute, wrote in a article Posted on October 20th. “A state may be able to implement a modest rate increase without much damage if other states do the same. But if other states cut taxes and you raise them, the effect can be disastrous.”
“In Colorado, income tax rates have been reduced since 2020, thanks to the voter initiatives under the auspices Independence Institute,” Natelson added. “But the decrease was small—from 4.63% to 4.4%. By contrast, most other states’ income tax cuts have been more dramatic.”
In addition to criticism that a progressive income tax measure would move Colorado in the opposite direction from competing states in a way that would make Colorado’s business tax climate less conducive to job creation and economic growth, opponents of the progressive income tax campaign argue that such a move would hurt low- and middle-income households.
“The people who get hit the hardest by punitive tiered levies are not ‘the rich,'” Natelson added. “Wealthy people generally find ways to avoid them. The people most affected are those who work to better themselves. Other victims of graduated taxes—though they may never know it—are workers who miss out on the opportunity to thrive in new and improved businesses. In other words, graduated taxes punish hope, hard work, productivity, upward mobility, and human well-being.”
Jake Fogleman, a fellow at Natelson’s Independence Institute, recently he wrote about another advantage of the flat income tax, which is that it makes it harder for politicians to raise the rate. “By ensuring that changes in tax policy affect all taxpayers equally,” Fogleman points out, the flat tax “prevents systems of imposing concentrated costs on small groups of residents.” As a result, Fogleman added, “the flat tax acts as a powerful political disincentive against policymakers who routinely make calls for higher taxes.”
By moving from a progressive income tax code in 1987 to a flat rate that has since been reduced by voters multiple times, Colorado was well ahead of a national policy trend that has become more pronounced in recent years. If Colorado voters approved a ballot measure in 2026 to return to a tiered income tax structure, Colorado would go from setting policy to a national outlier.
