There is a strong narrative surrounding the tax burden here in Colorado. Unlike some popular narratives repeated by the media, this one is almost half true. It goes a little something like this:
Colorado is a low tax state. From the beginning, our state government has asked very little of us. Which makes a lot of sense considering we’re all just a bunch of independent cowboys anyway. But this self-reliance, earn-your-own-way thinking went a little too far recently with the likes of the Taxpayers Bill of Rights (TABOR) and Arveschoug-Bird. Now our state is in a world of hurt compared to other states with higher revenues. We simply do not tax people enough…
Or something like that. You get the idea.
Anyway, like I said, that is almost half true. We decided to exploit some free labor of ours last year and put this popular narrative to the test. Under the guidance of our Fiscal Policy Center Director Penn Pfiffner, we had intern Anthony Gonzalez collect a ton of tax data and compare our tax burdens with the rest of the country. Aside from the difficulty in finding the tax data, there was another rather surprising twist we uncovered: WE’RE AVERAGE. Yup, it’s that simple. We aren’t special in any way whatsoever. We are just a bunch of average Joe’s, getting taxed like half the country and not taxed like the other half.
If you’d like to read how average we are, check out Anthony’s Issue Paper, “How Colorado’s Tax Burdens Rank Nationally.” If you’d like to hear even more about the paper in audio form, listen to this iVoices.org podcast with Penn Pfiffner and Anthony.
You might be wondering why the popular narrative is almost half right. Well, the narrative the way I usually hear it explicitly cites our low STATE tax burden. And that part is true. But it fails to consider the rest of the equation. It fails to consider the LOCAL tax burdens we Coloradans face. It’s in that part of the equation where we make up the ground we need to be stuck right in the middle – at 26th in the nation (where being #1 really sucks). Thus, with a relatively low state tax burden and a relatively high local tax burden, we end up in the middle on a per capita basis. The way I see it, we Coloradans are taxed at a lower rate pretty much any time we do anything at all, so it adds up.