In short, TABOR is a way to limit the growth of government. Under the amendment, revenue in excess of the TABOR limit must be returned to taxpayers, though it appears the legislature has some discretion in how it distributes those funds.
But Colorado’s legislature, chafing at TABOR’s limits, has been trying to undercut the amendment. It recently succeeded and, in doing so, redistributed revenues from the most productive people to the least productive.
This is from David R. Henderson, “Tabling TABOR,” TaxBytes, Institute for Policy Innovation, January 17, 2024.
Read the whole thing, which is the shortest TaxBytes I’ve written.
READER COMMENTS
robc
Jan 19 2024 at 11:18am
Every single year there is some sort of ballot measure trying to overturn Tabor. Even when defeated, like this fall, the legislature does everything in their power to undermine it.
They hate spending limits. Hate it.
And the governor, who Sumner for some reason thinks is some sort of libertarianish leaning democrat, supports them every step of the way. Except during the run up to his reelection, that year he luke-warmly supported Tabor. But as soon as he was reelected, he flipped against.
robc
Jan 19 2024 at 11:25am
Part of the problem is that the refund mechanism is wonky, which allows games to be played. If the Tabor refund was done as a direct reduction of the income tax rate, it would be easier. The “flat” rate is 4.4% (scare quotes around flat because there is a bonus tax for high income earners, so not technically flat anymore). The refund is a “sales tax refund” that uses 5 categories of income to determine the amount of sales tax to refund. I am in the 2nd highest group, so would have gotten about $940ish, but it was reduced to $800 as your article mentioned.
Until recently, the rate was higher than 4.4% and there had been a referendum passed that lowered the rate by some calculation every time there was a tabor refund available. But 4.4% was the limit, so that has expired. We need it done again permanently. If we are running $800 too much per person, we can reduce the rate a few hundreds of a percent.
robc
Jan 19 2024 at 11:29am
Just a note on HH for those who don’t know, since you didnt cover the details in the article:
Tabor has a baseline revenue amount the state can collect, it is adjusted each year for inflation and population growth. The big thing that HH tried to do (which was buried in the text) was to change that calculation to baseline+inflation+population growth+1%.
That 1% would have killed Tabor completely within a decade.
Jose Pablo
Jan 20 2024 at 1:24pm
“No man’s life, liberty, or property are safe when the legislature is in session.”
That’s a great quote!
Comments are closed.