Amendment 87 is the best chance to revitalize Colorado’s middle-class

“The taxes are coming! The taxes are coming! The taxes are coming!!!” cried bipartisan billionaires, centimillionaires and the network of nonprofits and media they control. All because Amendment 87, the graduated tax measure on this year’s ballot, would make them a little less unimaginably wealthy. 

Opponents have engaged in fear-mongering and false claims to try to defeat a ballot measure that would both help the state bridge its budgetary gaps and close the wealth gap a teeny, tiny bit. That is unacceptable to Amendment 87’s detractors.

While the state faces annual budget shortfalls and cuts hundreds of millions from public healthcare and education programs, opponents have been repeating debunked claims that the tax burden would fall on senior citizens, veterans, pensioners, farmers, puppies, apple pie and chubby-cheeked babies. They effectively bank on scare tactics to push voters back to the status quo. 

That status quo does not work for a majority of Coloradans. Historically, it is not what worked best for America either.

The wealth gap between the richest people in our society and literally everyone else has become a growing problem over the past few decades. Today’s ultra-wealthy hold a larger share of the American economy than the robber barons of the Gilded Age. And it is not close. The richest 0.00001 percent then controlled 4% of the national income; now that same percentage is over 12%.

What changed course a hundred years ago? Taxes on the rich. After hovering at around 25% after a post-World War I drop, the top marginal tax rate jumped to 63% in 1932, 79% in 1936 and between 81% and 92% from 1940 through 1963. It did not dip below 50% until the sixth year of President Ronal Reagan’s administration.

Many of the same folks who, rightly or wrongly, idolize America of the 1950s and early 1960s conveniently forget that those eras were built on a significant tax levied on the ultra-wealthy. The prosperous middle-class America at the heart of the idolatry existed only because substantial graduated taxes reduced the wage gap and leveled the distribution of wealth.

Unfortunately those policies were reversed and income inequality charts show a “U” beginning in the Gilded Age, dipping for decades, and then shooting back up again beginning in the 1980s.

That is why the middle-class feels so much poorer than its historical predecessors: it is.

In comparison to the ideal distribution of wealth 92% of Americans choose, the  bottom 80% of the country is actually poorer than the bottom 5% in the ideal. The level of wealth concentration becomes difficult to chart or represent. And it has only gotten worse recently, especially for minority races.  

That is the environment in which those at the very top have desperately tried to stop Amendment 87 from passing. 

It should not surprise anyone that the state’s wealthiest individuals do not want to lose any of it. They will and are fighting for every last cent. And because there are so few of them comparatively, they need to persuade a larger portion of the people suffering under the system that protects them to vote against their own interests.

As the ballot measure notes, and responsible reporting has reported, the vast majority of Coloradans will actually either receive a tax break or see no difference in the amount they pay. The increases only kick in once people start making more than $500,000 per year. So basically a single person making as much as an entire high school teaching department.

But those increases only get levied against dollars above the line. That is how a graduated tax system works. The person making $500,001 will only pay 3.7% on the first $25,000, 4.2% on anything between that and $100,000, 4.4% (the current rate) on the next amount to $500,000, and then the higher rates begin. So that person at $500,001? That person is actually paying less overall as well. You actually have to pull in more than $510,000 a year to pay more under the graduated system.

Of course, anyone making that much can probably afford to pay a little more. They are not struggling to put food on the table. They are not choosing between paying rent or medical bills. They do not need to figure out how to afford childcare.

The argument made by opponents, including Gov. Jared Polis — who happens to be worth at least several hundred million dollars — is that we will chase businesses away to other states. 

Except that rarely happens. Businesses choose states for multiple reasons, not just their tax rates. Look no farther than New York and California, the two states with the greatest concentration of large companies. Both employ graduated income taxes that top out over 13% — far above the 8.4% cap proposed for Colorado.

As for the seniors and veterans opponents want to scare? I wish there were more who brought in  $510,000 or more a year. But it is plain that they account for a very sparse few. The vast majority of both would receive a welcome tax cut and benefit from the services funded by Amendment 87.

Colorado has tried a low, flat-rate tax scheme for decades. It does not work for the majority. Amendment 87 is a chance to go in a new direction and Coloradans should seize it.

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