Colorado Evidence Analysis of the 2026 Ballot
Initiative 195: Graduated Income Tax
Executive Summary
Why this Report?
Ballot measures reach voters through the General Assembly, known as referred measures, or when citizens initiate measures. Leading up to election day, Colorado voters typically receive information from the Blue Book voting guide, which provides a nonpartisan summary of the measure, and from supporters and opponents of these ballot measures through paid media and direct voter contacts. Each side makes claims about the positive or negative consequences that will result if the ballot measure is passed.
Many of these ballot measures have significant consequences. But too often missing from the public discussion is an objective analysis of the evidence behind the supporters’ and opponents’ claims about the impact of the measures.
This report and other Romer Institute ballot measure reports are designed to fill that gap by equipping voters with the best available, unbiased information to make their decisions. I
Initiative 195, a measure proposed for the November 2026 ballot, would replace Colorado’s flat income tax rate with a graduated income tax structure. This report provides objective analysis of what the measure would do, how it would affect taxpayers and businesses across all income levels, and what the research evidence says about its likely economic consequences.
What the Measure Would Do
Initiative 195 would eliminate Colorado’s current flat income tax rate of 4.4% and replace it with rates ranging from 3.71% to 8.41%, depending on income level. Taxpayers with taxable income under $100,000 would pay lower rates than under current law. Taxpayers with taxable income between $100,000 and $500,000 would pay a rate (4.41%) very close to the current rate. Taxpayers with taxable income above $500,000 would face a larger increase in their marginal rate, from 4.4% to between 7.41% and 8.41% depending on income level. Additional revenue generated by the measure would be distributed to K–12 education, state-funded healthcare, and early childhood education.
How It Would Affect Taxpayers: Key Findings
The table below summarizes the distributional impact across income ranges. The measure reduces tax bills for the large majority of Colorado taxpayers and increases them for the approximately 51,300 filers with taxable income above $500,000. The current-law column also illustrates that under the existing flat tax rate policy, taxes paid are proportional to household income, with higher-income filers paying proportionally more in absolute dollars. A household earning $1 million annually currently pays 10 times the tax of a household with annual income of $100,000 at the same 4.4% rate. Initiative 195 would increase both the dollar amounts and the rates paid by filers above $500,000.
| Taxable Income | Current Taxes Owed | Taxes Owed under Initiative 195 | $ Change | Share of Income – Current Law | Share of Income – Initiative 195 |
|---|---|---|---|---|---|
| $25,000 | $1,100 | $928 | -$173 | 4.4% | 3.7% |
| $50,000 | $2,200 | $1,980 | -$220 | 4.4% | 4.0% |
| $100,000 | $4,400 | $4,085 | -$315 | 4.4% | 4.1% |
| $250,000 | $11,000 | $10,700 | -$300 | 4.4% | 4.3% |
| $500,000 | $22,000 | $21,725 | -$275 | 4.4% | 4.3% |
| $750,000 | $33,000 | $40,250 | $7,250 | 4.4% | 5.4% |
| $1,000,000 | $44,000 | $60,025 | $16,025 | 4.4% | 6.0% |
| $5,000,000 | $220,000 | $396,425 | $176,425 | 4.4% | 7.9% |
| Source: Author's calculations based on current Colorado law and Initiative 195 proposed tax rates. | |||||
- Decades of academic research on the economic effects of state income tax changes yields a consistent but nuanced picture. The weight of the evidence indicates: Studies examining individual income tax increases found small negative effects on state economic growth on average (moderate evidence), and modest negative effects on the location decisions of very high earners and highly skilled workers (moderate-to-high evidence).
- Research finds no detectable effect of individual income tax increases on overall employment or firm formation (moderate-to-high evidence), and no detectable effect of corporate income tax increases on overall state economic growth (moderate evidence).
- Studies examining corporate income taxes found modest negative effects on business growth, employment, and wages (high-to-moderate evidence), but little detectable effect on overall state economic growth (moderate evidence).
- The largest effects in the research are on revenue collection. High earners respond to large rate increases by relocating, reclassifying income, and shifting its timing, and these responses grow with the size of the increase. Initiative 195 would nearly double the marginal rate above $500,000 from one of the lowest starting rates of any state that has enacted an increase of this kind. In the closest precedent, California's Proposition 30, behavioral responses eroded an estimated 45 percent of projected new revenue in the first year and 61 percent within two years (moderate-to-high evidence).
- On the spending side, the strongest causal evidence is at the program level, which is how this measure directs the additional state revenue from higher income tax rates. Sustained increases in K–12 spending improve student attainment and adult earnings, with the largest effects for students from low-income families (high certainty).
- The net economic effect of this measure depends substantially on how the additional revenue is deployed, a question the measure leaves to the General Assembly and Governor.
Several limitations apply in translating this research to Initiative 195 specifically. Effect sizes vary significantly across states, time periods, and types of tax changes. Additionally, high earners’ incomes are more cyclical; revenues generated by this measure would be more volatile during recessions than revenues generated by a flat tax. Whether new revenues would supplement or, in practice, supplant existing appropriations is a policy implementation question that the measure does not definitively resolve.
Revenue and Budget Context
The measure would generate new revenue distributed to K-12 education, state-funded healthcare, and early childhood education. These areas collectively represent over 57% of the state’s current budget. The measure specifies that new revenues must supplement, not supplant, existing appropriations in the three designated areas, as required under section 24-77-103.3 (2), though the practical effect of that requirement depends on future appropriations decisions. Annual funding levels within those areas will be determined through the General Assembly's regular appropriations process.
Proposed for the 2026 Ballot: Initiative 195
Initiative 195, proposed for the November 2026 ballot, would change Colorado’s income tax policy.
Who
This is a citizen-initiated measure sponsored by Chris DeGruy Kennedy and Kiyana Newell through the Bell Policy Center and New Era Colorado Action Fund.[1] The Bell Policy Center is a nonprofit research and advocacy organization focused on economic mobility. New Era Colorado Action Fund is a social welfare nonprofit.
What
Initiative 195 would make the following changes to Colorado’s constitution and statutes:
Modify Taxpayer’s Bill of Rights (TABOR) language in the Colorado Constitution to allow income to be taxed at more than one rate;
Remove Colorado’s existing flat income tax rate of 4.4% and impose a graduated income tax rate structure with rates ranging from 3.71% to 8.41% on both individual and corporate income; and
Distribute additional revenue collected to K–12 education, healthcare, and early childhood education.
Table 1 shows the current and proposed tax rate structures. Under Initiative 195, as individuals move up into higher brackets, their additional income is taxed at that higher rate.
| Taxable Income | Current Flat Rate | Proposed Graduated Rate | Change |
|---|---|---|---|
| $25,000 or less | 4.4% | 3.71% | -0.69% |
| $25,001 – $100,000 | 4.4% | 4.21% | -0.19% |
| $100,001 – $500,000 | 4.4% | 4.41% | +0.1% |
| $500,001 – $750,000 | 4.4% | 7.41% | +3.01% |
| $750,001 – $1,000,000 | 4.4% | 7.91% | +3.51% |
| $1,000,001 or more | 4.4% | 8.41% | +4.01% |
| Source: Colorado Secretary of State, Initiative #195 Final Text. | |||
Why
Citizen-initiated measures require a petition verified by the Secretary of State’s office. To qualify for the 2026 ballot, the measure requires 124,238 valid signatures, including at least 2% of registered voters in each of Colorado’s 35 state senate districts.[2] Proponents submitted petition signatures to the Secretary of State’s office on August 3, 2026; as of this writing, the office’s verification of whether the measure qualifies for the ballot is pending.[3]
A competing measure, Initiative 232, backed by Advance Colorado, would cap Colorado’s individual and corporate income tax rates at the current 4.4%. If both measures qualify for the ballot and are approved by voters, the conflicting provisions of the measure receiving the greater number of affirmative votes would take effect.[4]
Background
| Income Taxes |
| Income tax is a tax paid by individuals and businesses on earnings, wages, dividends, and interest to fund general government services. Tax rates can be flat – a single rate applied to all income – or graduated, applying higher rates to higher levels of income. Under a flat rate, all taxpayers pay the same percentage regardless of income, though they pay more in absolute dollars as income rises. Under a graduated rate, both the percentage and the absolute dollar amount increase with income above each threshold. |
| The United States federal government has applied a graduated income tax since 1913, when the Sixteenth Amendment was ratified. As of 2025, federal rates range from 10% to 37%. |
| Colorado has collected individual income taxes since 1937. Between 1937 and 1987, Colorado applied a graduated income tax, increasing rates based on income levels. From 1937 to 1959 rates ranged from 1% to 10%. Since then, the following rate changes have occurred: |
|
Colorado has collected corporate income taxes since 1937 as well. The rates have changed over time, including a brief period with graduated rates in the 1980s. Since then, the following changes have occurred: |
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Among the 50 states, 42 states and the District of Columbia impose an individual income tax. Of those, 14 use a flat rate and 27 states plus the District of Columbia use a graduated structure.[6] |
How Individual Income Tax Is Calculated |
| Colorado taxable income begins with federal taxable income. The state then makes specific additions (such as state income taxes deducted federally and certain qualified business income amounts) and subtractions (such as contributions to 529 savings plans and retirement income for eligible filers). The resulting Colorado taxable income is multiplied by the applicable rate, and state tax credits are subtracted to arrive at Colorado taxes owed. [6] |
How Corporate Income Tax Is Calculated |
| Since 2017, the federal corporate income tax has been a flat 21%, and businesses are taxed on their income after subtracting expenses and usually owe taxes only when they make a profit.[7] Colorado corporate income tax is calculated by applying the Colorado rate to income earned from business activities in Colorado, after allowable deductions for employee compensation, operating costs, asset depreciation, and other items. Businesses pay tax only on net income – meaning many businesses in any given year report zero or negative taxable income and owe no tax. [7] |
How Does This Change Impact People and Businesses?
Methodology note:This report presents tax impacts using multiple frameworks - absolute tax bill, percentage change in tax bill, and effective tax rate - to avoid bias toward any single view of tax fairness. The measure’s own income thresholds ($500,000, $750,000, and $1,000,000) are used as the primary organizing framework for distributional analysis rather than percentile groupings.
Initiative 195 would reduce state income tax bills for the majority of Colorado taxpayers while increasing them for taxpayers with taxable income above $500,000. The largest increases in absolute dollar terms would fall on the approximately 15,000 filers with taxable income of over $1 million in 2023. Increases for businesses follow a similar pattern but are more concentrated, given that a small number of businesses account for nearly all corporate taxable income in the state.
Impact on People and Families
How Would People’s Tax Bills Change?
Most Coloradans would pay less in state income tax or see little change under Initiative 195. Tax bills would increase for taxpayers with taxable income above $500,000 – approximately 51,300 filers, or about 1.7% of Colorado taxpayers based on 2023 data.
Table 2 shows how the change would affect different income groups, using 2023 Colorado Department of Revenue data. The current-law column also illustrates that under the existing flat tax rate policy, taxes paid are proportional to household income, with higher-income filers paying proportionally more in absolute dollars. A household earning $1 million annually would pay 10 times the tax of a household with annual income of $100,000 at the same 4.4% rate. The measure would raise both the dollar amount and the effective rate for filers above $500,000.
| Taxable Income | Current Taxes Owed | Taxes Owed under Initiative 195 | $ Change | Share of Income – Current Law | Share of Income – Initiative 195 |
|---|---|---|---|---|---|
| $25,000 | $1,100 | $928 | -$173 | 4.4% | 3.7% |
| $50,000 | $2,200 | $1,980 | -$220 | 4.4% | 4.0% |
| $100,000 | $4,400 | $4,085 | -$315 | 4.4% | 4.1% |
| $250,000 | $11,000 | $10,700 | -$300 | 4.4% | 4.3% |
| $500,000 | $22,000 | $21,725 | -$275 | 4.4% | 4.3% |
| $750,000 | $33,000 | $40,250 | $7,250 | 4.4% | 5.4% |
| $1,000,000 | $44,000 | $60,025 | $16,025 | 4.4% | 6.0% |
| $5,000,000 | $220,000 | $396,425 | $176,425 | 4.4% | 7.9% |
| Source: Author's calculations based on current Colorado law and Initiative 195 proposed tax rates. | |||||
Impact on Businesses
How Would Corporations’ Tax Payments Change?
For most businesses, nothing would change at all in a given year. A small number of the highest earning businesses would be impacted. But the effect over multiple years is difficult to determine based on a single year of tax data.
In 2023, nearly 68,000 businesses filed a Colorado corporate tax return, but approximately 60% of them, an estimated 40,000 businesses, paid no Colorado corporate income tax because they reported zero or negative taxable income. Those businesses would be unaffected.
| Income Group | # of Filers | Avg. Federal Taxable Income | Avg. CO Taxable Income | Pays CO Tax? |
|---|---|---|---|---|
| Lowest 60% (an est. 41,500 firms) | ~41,500 | -$19.8M | -$719,300 | No |
| 60–80% | 13,500 | $61,800 | $43,000 | Yes |
| 80–95% | 10,100 | $222M | $2.5M | Yes |
| 95–99% | 2,700 | $806M | $8.5M | Yes |
| Top 1% | 676 | $2.8B | $27M | Yes |
| Source: Colorado Department of Revenue Data, 2023. | ||||
The 676 businesses in the top 1% by income earned nearly all corporate income in the state and already paid nearly all corporate income tax. Under the flat tax, the average business in this group paid approximately $1.2 million in Colorado corporate income tax in 2023. Under Initiative 195, that same business would pay approximately $2.2 million, an increase of roughly $1 million, or 83%.
Economic Impact
Evidence from Research Literature
Dozens of academic studies have examined the economic consequences of individual and corporate income tax changes across U.S. states. The strongest studies used quasi-experimental methods. For example, comparing neighboring counties on opposite sides of a state border before and after a tax change to estimate causal effects. Weaker studies established associations without demonstrating causality. The tax studies reviewed ranged from Level 1-3 – Theory Informed. Quasi-experimental methodologies estimated a causal link and were considered more rigorous. Observational studies that established an associational link were considered less rigorous. Additional information about the evidence rankings is in the Appendix.
This section presents findings organized by economic outcome, with evidence level and evidence certainty noted for each. A summary of the evidence framework is in the Appendix.
The research literature reviewed in this section captures important but incomplete economic effects of Initiative 195. The peer-reviewed studies measure effects that are observable and quantifiable in historical data - changes in employment, firm counts, GDP growth, and taxpayer location decisions. They do not fully capture how a change in tax structure affects business and investor behavior in real time, how revenue timing shifts in the transition period, or how uncertainty about future rates affects risk-taking and investment decisions. These factors should be considered alongside the quantitative findings.
Summary of Research Findings
Research indicates that increasing individual and corporate income taxes has very small to modest negative effects on most economic outcomes. These negative effects are generally larger for business and employment variables and smaller for overall state economic growth. On the spending side, the strongest evidence is at the program level, particularly for K–12 education. Summarizing the evidence from the studies reviewed:
| Economic Outcome | Direction and Magnitude of Effect | Evidence Level / Certainty |
|---|---|---|
| State economic growth (individual income tax) | Very small negative effect | Level 2–3 / Moderate |
| Employment and firm relocation (individual income tax) | No effect overall; modest negative effect on very high earners' location decisions | Level 2–3 / Moderate-to-High |
| State economic growth (corporate income tax) | No impact | Level 2–3 / Moderate |
| Business growth, employment, wages (corporate income tax) | Modest negative effects | Level 3 / High-to-Moderate |
| Investment (corporate income tax) | Modest negative effect | Level 2–3 / Moderate-to-Low |
| Student attainment and adult earnings (K–12 spending) | Meaningful positive effects; largest for low-income students | Level 5 / High |
| State economic growth (general government spending) | No credible evidence | No Level |
Individual Income Tax Effects on the Economy
| State Economic Growth | ||
| Question: What are the economic consequences of increasing state individual income taxes on state economic growth and high-earner out-migration? | ||
| Evidence Level: 2–3 Theory Informed | ||
| Evidence Certainty: Varies by outcome | ||
| The weight of the evidence indicates a small negative effect of higher individual income taxes on state economic growth, and little to no effect on overall employment. However, there are meaningful effects on the location decisions of the very highest earners. | ||
State economic growth:
| ||
High-earner relocation:
| ||
Application to Colorado: The research suggests some degree of high-earner behavioral response is likely, including relocation, income timing strategies, and reclassification of income, though the magnitude is uncertain and will depend on individual circumstances and Colorado’s overall tax and economic environment relative to other states. | ||
High-Earner Behavioral Responses and Revenue Erosion | ||
| A study of California's 2012 Proposition 30 high-earner tax increase found that taxpayers earning over $4 million annually reduced their reported income by roughly 9–10% in response to a 3 percentage point tax rate hike, primarily through income sheltering, compensation restructuring, and relocation. The revenue loss from high earners leaving the state and reducing their reported income combined to erase an estimated 45% of California's expected new tax revenues in the first year and 61% within two years. [13] | ||
Corporate Income Tax Effects on the Economy | ||
| Question: What are the economic consequences of increasing state corporate income taxes? | ||
| Evidence Level: 1–3 Theory Informed | ||
| Evidence Certainty: Varies by outcome | ||
| Stronger studies with high-to-moderate evidence found modest negative effects of higher corporate taxes on employment, wages, and firm growth, and investment, but little impact on overall state economic growth. [2] | ||
State economic growth:
|
Government Spending Effects on the Economy
Question: What are the economic consequences of increasing state government expenditures funded by tax revenues?
Evidence Level: 4–5 Evidence-Informed to Proven (program-level studies)
Evidence Certainty: High for program-level studies
Well-identified evidence on how state government spending affects aggregate state economic growth does not exist; aggregate studies cannot reliably separate the effects of spending from the economic conditions that drive spending decisions. The strongest causal evidence operates at the program level, and it is concentrated in the areas this measure would fund.
· A meta-analysis of approximately 30 quasi-experimental studies of U.S. school spending found that sustained increases in K–12 spending improve student achievement, educational attainment, and adult earnings, with the largest effects for students from low-income families[i], a meaningful long-run effect with high certainty.
Other Factors to Consider
Tax Structure, Business Climate Perception, and Investment Signals
The research literature measures what happened to GDP, employment, and firm counts after tax changes took effect. It does not measure how a proposed change in tax structure, as distinct from tax level, affects business location decisions, site selection frameworks, and investor perception before and during implementation. These effects operate through different mechanisms than the ones the literature captures, and they matter independently of whether the direct economic effects are large or small. Recent evidence comes from California’s Proposition 30, which raised top marginal rates by up to 3 percentage points; the modeled responses of affected taxpayers, through both high-earner relocation and reduced reported income, eroded an estimated 45 percent of the projected new revenue in the first year and 61 percent within two years.[ii]
Colorado's reputation as a relatively low-tax, business-competitive state compared to California has been a documented economic development asset.[iii] A graduated income tax structure with top rates between 7.41% and 8.41%, up from the current rate of 4.4%, changes that positioning significantly. A change of this magnitude requires an understanding of what the structure signals to businesses and investors making forward-looking decisions about where to locate, hire, and invest.
Perception effects are harder to quantify than direct tax incidence and are not graded under this report’s evidence framework.
Revenue Timing and Volatility
The behavioral response literature documents that high earners routinely accelerate income recognition before a rate increase takes effect, moving bonuses, capital gains realizations, and business income into the prior tax year.[iv] This creates a revenue spike in the final year before implementation followed by a decline in the first year after implementation relative to what taxes would have been with the new rate, although incomes revert to growth trends similar to before the tax increase over the next few years.
This is documented in studies of prior state and federal rate increases and is a standard consideration in state revenue forecasting. It matters for budget planning because the revenues generated by this measure could be less stable than flat-rate revenues over economic cycles. High earners' incomes are more cyclical than those of the general population. Revenues from the top brackets would decline more steeply in recessions precisely when public spending needs are highest.[v]
Entrepreneurial Risk-Taking and Investment Timing
Graduated rate structures with high top marginal rates can affect decisions that do not show up in employment or GDP data in the short run but could impact Colorado's economic trajectory over time. These include decisions about whether to grow a business aggressively in a given year, whether to pursue a high-risk venture with a large potential payoff, whether to hold or sell appreciating assets, and whether to structure business income as salary or capital gain. For Colorado's technology and startup ecosystem, where a disproportionate share of high earners are entrepreneurs whose income is variable and sensitive to marginal rates on peak years, these effects could impact total taxes collected from the top income tax tiers.[vi]
[i] C. Kirabo Jackson and Claire L. Mackevicius, “What Impacts Can We Expect from School Spending Policy? Evidence from Evaluations in the United States,” American Economic Journal: Applied Economics 16, no. 1 (2024); C. Kirabo Jackson, Rucker C. Johnson, and Claudia Persico, “The Effects of School Spending on Educational and Economic Outcomes: Evidence from School Finance Reforms,” Quarterly Journal of Economics 131, no. 1 (2016): 157–218. Evidence Level 5 (meta-analysis of quasi-experimental studies) / High certainty.
[ii] Joshua Rauh and Ryan Shyu, “Behavioral Responses to State Income Taxation of High Earners: Evidence from California,” American Economic Journal: Economic Policy 16, no. 1 (2024): 34–86. Using administrative tax data, the study finds that behavioral responses eroded 45.2 percent of the windfall revenue from California’s Proposition 30 within the first year and 60.9 percent within two years, driven largely by reduced reported income among high earners who remained in the state. Evidence Level 3 (Theory Informed) / High certainty.
[iii] Jed Kolko, David Neumark, and Marisol Cuellar Mejia, “What Do Business Climate Indexes Teach Us About State Policy and Economic Growth?” Journal of Regional Science 53, no. 2 (2013): 220–255, finding that business climate indexes emphasizing taxes and business costs are associated with state economic growth, unlike indexes emphasizing quality-of-life factors. Evidence Level 2 (Theory Informed) / Moderate certainty.
[iv] Austan Goolsbee, “What Happens When You Tax the Rich? Evidence from Executive Compensation,” Journal of Political Economy 108, no. 2 (2000): 352–378 (documenting large-scale acceleration of executive income into the year before the 1993 federal rate increase); Emmanuel Saez, “Taxing the Rich More: Preliminary Evidence from the 2013 Tax Increase,” Tax Policy and the Economy 31 (2017): 71–120 (documenting substantial retiming of capital gains, dividends, and other income into 2012 ahead of the 2013 federal rate increase, with the largest responses at the very top of the income distribution); Alan J. Auerbach and Joel Slemrod, “The Economic Effects of the Tax Reform Act of 1986,” Journal of Economic Literature 35, no. 2 (1997): 589–632 (concluding that the clearest behavioral responses to the 1986 reform involved the timing and reclassification of income). Evidence Levels 2–3 (Theory Informed) / High-to-Moderate certainty.
[v] Howard Chernick, Cordelia Reimers, and Jennifer Tennant, “Tax Structure and Revenue Instability: The Great Recession and the States,” IZA Journal of Labor Policy 3, art. 3 (2014); R. Alison Felix, “The Growth and Volatility of State Tax Revenue Sources in the Tenth District,” Federal Reserve Bank of Kansas City Economic Review (Third Quarter 2008). Chernick and coauthors find that potential revenue exposure to downturns is greater in more progressive states, though the largest source of interstate variation in revenue declines was the concentration of income and capital gains among the top 5 percent of taxpayers rather than rate progressivity itself. Evidence Levels 1–2 (Theory Informed) / Moderate certainty.
[vi] Julie Berry Cullen and Roger H. Gordon, “Taxes and Entrepreneurial Risk-Taking: Theory and Evidence for the U.S.,” Journal of Public Economics 91, no. 7–8 (2007): 1479–1505; Ufuk Akcigit, John Grigsby, Tom Nicholas, and Stefanie Stantcheva, “Taxation and Innovation in the Twentieth Century,” Quarterly Journal of Economics 137, no. 1 (2022): 329–385 (finding that higher personal and corporate income taxes reduce the quantity and location of innovation by individual inventors and firms). Evidence Levels 2–3 (Theory Informed) / High-to-Moderate certainty.
Appendix
[1] Colorado Department of State 2025-2026 Initiative Filings, Agendas & Results. https://www.coloradosos.gov/pubs/elections/Initiatives/titleBoard/index.html
[2] https://www.sos.state.co.us/pubs/elections/Initiatives/guide/main.html
[3] “Supporters of Colorado graduated income tax measure submit required number of petition signatures,” Colorado Newsline, August 3, 2026, https://coloradonewsline.com/briefs/colorado-graduated-income-tax-measure-signatures/.
[4] Colorado Secretary of State, “Initiative #232: Income Tax Rate Cap,” Initiative and Referendum Title Board, https://www.coloradosos.gov/pubs/elections/Initiatives/titleBoard/index.html; Legislative Council Staff, Initiative 232 Fiscal Summary, March 3, 2026.
[5] Colorado Legislative Council, Individual Income Tax
[6] https://taxfoundation.org/data/all/state/state-income-tax-rates/
[7] Tax Cuts and Jobs Act of 2017, Pub. L. No. 115-97, § 13001(b), 131 Stat. 2054
[8] Goff, B., Lebedinsky, A., & Lile, S. (2012). A MATCHED PAIRS ANALYSIS OF STATE GROWTH DIFFERENCES. Contemporary Economic Policy, 30(2), 293–305. https://doi.org/10.1111/j.1465-7287.2011.00258.x
[9] Ojede, “Tax Policy and State Economic Growth,” 2012; Gale, W. G., Krupkin, A., & Rueben, K. (2015). The relationship between taxes and growth at the state level: New evidence. National Tax Journal, 68(4), 919–942. https://doi.org/10.17310/NTJ.2015.4.02; Yamarik, S. (2000). Can tax policy help explain state-level macroeconomic growth? Economics Letters, 68(2), 211–215. https://doi.org/10.1016/s0165-1765(00)00242-1; Alm, J. & Rogers, J. (2011). Do State Fiscal Policies Affect State Economic Growth? Public Finance Review 39(4):483–526. Annual state (and state+local) data, 1947–1997 (48 contiguous states); Bruce, D., & Deskins, J. (2012). Can state tax policies be used to promote entrepreneurial activity? Small Business Economics, 38, 375–397. https://doi.org/10.1007/s11187-010-9262-y
[10] Young, C., & Varner, C. (2011). MILLIONAIRE MIGRATION AND STATE TAXATION OF TOP INCOMES: EVIDENCE FROM A NATURAL EXPERIMENT. National Tax Journal, 64(2), 255–284.
[11] Rauh, Joshua, & Ryan Shyu. (20212024). “Behavioral responses to state income taxation of high earners: Evidence from California.” American Economic Journal: Economic Policy 16 (1):34-86.
[12] Moretti, Enrico, and Daniel J. Wilson. “The Effect of State Taxes on the Geographical Location of Top Earners: Evidence from Star Scientists.” The American Economic Review 107, no. 7 (2017): 1858–1903. http://www.jstor.org/stable/44871748.
[13] Rauh, Joshua, & Ryan Shyu. (2024). “Behavioral responses to state income taxation of high earners: Evidence from California.” American Economic Journal: Economic Policy 16 (1):34-86.
[14] Goff, “Matched Pairs Analysis.”
[15] Gale, “Relationship Between Taxes and Growth.”
[16] Giroud, X., & Rauh, J. (2019). State Taxation and the Reallocation of Business Activity: Evidence from Establishment-Level Data. Https://Doi.Org/10.1086/701357, 127(3), 1262–1316. https://doi.org/10.1086/701357
[17] Ljungqvist, A., and Smolyansky, M. (2014) To Cut or Not to Cut? On the Impact of Corporate Taxes on Employment and Income. NBER Working Paper No. w20753, Available at SSRN: https://ssrn.com/abstract=2541529
[18] Suárez Serrato, J. C., & Zidar, O. (2016). Who benefits from state corporate tax cuts? A local labor markets approach with heterogeneous firms. American Economic Review, 106(9), 2582–2624. https://doi.org/10.1257/AER.20141702
[19] Wasylenko, “Taxation and Economic Development.”
[20] Agostini, C. A. (2007). The impact of state corporate taxes on FDI location. Public Finance Review, 35(3), 335–360. https://doi.org/10.1177/1091142106292491
[21] Chirinko, R. S., & Wilson, D. J. (2010). State Business Taxes and Investment: State-by-State Simulations. FRBSF Economic Review. www.frbsf.org/csip/taxapp.php
[22] C. Kirabo Jackson and Claire L. Mackevicius, “What Impacts Can We Expect from School Spending Policy? Evidence from Evaluations in the United States,” American Economic Journal: Applied Economics 16, no. 1 (2024); C. Kirabo Jackson, Rucker C. Johnson, and Claudia Persico, “The Effects of School Spending on Educational and Economic Outcomes: Evidence from School Finance Reforms,” Quarterly Journal of Economics 131, no. 1 (2016): 157–218. Evidence Level 5 (meta-analysis of quasi-experimental studies) / High certainty.
[23] Joshua Rauh and Ryan Shyu, “Behavioral Responses to State Income Taxation of High Earners: Evidence from California,” American Economic Journal: Economic Policy 16, no. 1 (2024): 34–86. Using administrative tax data, the study finds that behavioral responses eroded 45.2 percent of the windfall revenue from California’s Proposition 30 within the first year and 60.9 percent within two years, driven largely by reduced reported income among high earners who remained in the state. Evidence Level 3 (Theory Informed) / High certainty.
[24] Jed Kolko, David Neumark, and Marisol Cuellar Mejia, “What Do Business Climate Indexes Teach Us About State Policy and Economic Growth?” Journal of Regional Science 53, no. 2 (2013): 220–255, finding that business climate indexes emphasizing taxes and business costs are associated with state economic growth, unlike indexes emphasizing quality-of-life factors. Evidence Level 2 (Theory Informed) / Moderate certainty.
[25] Austan Goolsbee, “What Happens When You Tax the Rich? Evidence from Executive Compensation,” Journal of Political Economy 108, no. 2 (2000): 352–378 (documenting large-scale acceleration of executive income into the year before the 1993 federal rate increase); Emmanuel Saez, “Taxing the Rich More: Preliminary Evidence from the 2013 Tax Increase,” Tax Policy and the Economy 31 (2017): 71–120 (documenting substantial retiming of capital gains, dividends, and other income into 2012 ahead of the 2013 federal rate increase, with the largest responses at the very top of the income distribution); Alan J. Auerbach and Joel Slemrod, “The Economic Effects of the Tax Reform Act of 1986,” Journal of Economic Literature 35, no. 2 (1997): 589–632 (concluding that the clearest behavioral responses to the 1986 reform involved the timing and reclassification of income). Evidence Levels 2–3 (Theory Informed) / High-to-Moderate certainty.
[26] Howard Chernick, Cordelia Reimers, and Jennifer Tennant, “Tax Structure and Revenue Instability: The Great Recession and the States,” IZA Journal of Labor Policy 3, art. 3 (2014); R. Alison Felix, “The Growth and Volatility of State Tax Revenue Sources in the Tenth District,” Federal Reserve Bank of Kansas City Economic Review (Third Quarter 2008). Chernick and coauthors find that potential revenue exposure to downturns is greater in more progressive states, though the largest source of interstate variation in revenue declines was the concentration of income and capital gains among the top 5 percent of taxpayers rather than rate progressivity itself. Evidence Levels 1–2 (Theory Informed) / Moderate certainty.
[27] Julie Berry Cullen and Roger H. Gordon, “Taxes and Entrepreneurial Risk-Taking: Theory and Evidence for the U.S.,” Journal of Public Economics 91, no. 7–8 (2007): 1479–1505; Ufuk Akcigit, John Grigsby, Tom Nicholas, and Stefanie Stantcheva, “Taxation and Innovation in the Twentieth Century,” Quarterly Journal of Economics 137, no. 1 (2022): 329–385 (finding that higher personal and corporate income taxes reduce the quantity and location of innovation by individual inventors and firms). Evidence Levels 2–3 (Theory Informed) / High-to-Moderate certainty.
[28] Colorado Secretary of State, "Initiative #195: Graduated Income Tax, Final Text," Initiative and Referendum Title Board, accessed March 30, 2026, https://www.coloradosos.gov/pubs/elections/Initiatives/titleBoard/index.html.
[29] JBC Staff HCPF Briefing 2025, https://content.leg.colorado.gov/sites/default/files/fy2026-27_hcpbrf1.pdf
[30] Joint Budget Committee Staff, Budget Package & Long Bill Narrative, Fiscal Year 2026-27: Health Care Policy and Financing (Denver: Colorado General Assembly, 2026), 47-49, https://content.leg.colorado.gov/publications/fy-2026-27-budget-package-and-long-bill-narrative.
[31] Colorado Legislative Council Staff, 2024 School Finance in Colorado (annual publication series), FY 2025–26 figures.
[32] U.S Census Bureau 2023 Annual Survey of School System Finances.
[33] Colorado Legislative Council Staff, Understanding the State Budget (legislator orientation paper), pp. on school finance and the BSF.
Colorado Legislative Council Staff, State Education Fund Annual Report, December 2024, discussing elimination of the budget stabilization factor under SB 24-188 and HB 24-1448 and phased implementation of the new school finance formula beginning FY 2025–26.
[34] https://leg.colorado.gov/bills/sb23-287
[35] American Institutes for Research, Equity and Adequacy of Colorado School Funding: A Cost-Modeling Approach, January 2025, commissioned by the Colorado Department of Education under Senate Bill 23-287.
[36] Augenblick, Palaich and Associates, with Picus Odden & Associates and Afton Partners, Colorado Input-Based Financial Adequacy Study Report, January 2025, commissioned by the Colorado Department of Education under Senate Bill 23-287.
[37] https://childcaregap.org/
[38] https://info.childcareaware.org/hubfs/2023%20Price%20Fact%20Sheet/Colorado%202023_Price%20of%20Care.pdf
[39] https://content.leg.colorado.gov/sites/default/files/CY26_earsup_0.pdf
[40] https://coloradosun.com/2025/05/13/colorado-child-care-assistance-program-enrollment-freezes/