How Amendment 87 would change Colorado income taxes

How the tax brackets would work

Colorado voters will decide Nov. 3 whether to replace the state’s 4.4% flat income tax with six marginal rates under Amendment 87. A marginal system applies each rate only to income within that bracket, not to a filer’s entire income.

The first of taxable income would be taxed at 3.7%. Income from to would face a 4.2% rate, and income from to would remain at 4.4%.

Higher rates would begin above. Income from to would be taxed at 7.4%, income from to at 7.9%, and income above at 8.4%.

Joint filers would use the same brackets but have larger standard deductions than single filers. Businesses would pay the graduated rates on their profits.

Where the money would go

The change would raise overall state tax collections while reducing bills by hundreds of dollars for most residents. The highest-earning 0.01% of Coloradans could owe nearly twice as much in state income tax.

Revenue generated by the amendment would be kept separate and could be spent only on K-12 education, health care, early-childhood care and early education. It would have to supplement, rather than replace, existing legislative spending in those areas.

The added revenue would not count toward the Taxpayer’s Bill of Rights revenue limit. It therefore would not be refunded or reduce refunds caused by other collections above that limit.

Supporters describe the measure as a fairer tax structure that would fund public services. Opponents call it a tax increase exceeding billion and warn of economic effects. The Cato Institute has argued that flat taxes are associated with higher individual incomes and economic growth.