Perusing the Denver Post opinion section this morning, a bizarre headline caught my attention, “Proud to Pay Taxes in Colorado.” What a strange statement, especially in light of the recent scandals involving taxpayer subsidized Solyndra (and soon Vestas) and the General Services Administration (GSA). Why would anyone be proud to pay for those debacles? Anyway, as I read the piece written by Ali Mickelson of the Colorado Fiscal Policy Institute, I realized a few things: First, for someone so proud to pay taxes, it’s strange that Ali works for the nonprofit Fiscal Policy Institute. I can only wonder if Ali is adding an extra zero or two onto her income taxes to make up for the taxes that her employer doesn’t pay. Secondly, her whole argument assumes that without tax funded and state provided goods and services, we would all be living hand to mouth on subsistence farms. I disagree. The goods and services that consumers want would exist whether government forced them on us or not. It’s the frivolous, inefficient, wasteful spending on things people don’t want that would disappear along with our heavy tax burdens. Finally, despite my disagreement with Ali’s claims, they are her opinion and she’s entitled to it. However, there is one claim in the article that I must take issue with. She says,
This year, when you are writing your check, remember that Colorado is a low-tax state. Colorado’s combined state and local taxes rank 44th lowest out of the 50 states per $1,000 of income.
Now that is not an opinion, that is a statement of fact. And it’s a fact that is completely wrong.
I hate to break the news to Ali and her tax and spend compatriots over at the Fiscal Policy Institute, but being what they are, they really should know the truth about Colorado’s fiscal and tax policy. We are not 44th in the nation in our tax burden, we are smack dab in the middle at 26th. What the left fails to mention every time they claim Colorado is a low tax state is that state taxes are only HALF the equation. It would be like saying, “My company is rich! We took in $1,000,000 in revenue this month!” But then fail to mention that they spent $2,000,000 to make it. When you only look at state taxes, it is true that Colorado falls towards the end of the spectrum. But when you take into account the rest of the equation – the LOCAL tax burden – Colorado moves back up towards the middle. Why? Because in Colorado, we do most of our taxation at the local level. Per capita, our local taxes are some of the highest in the country. A good way to look at it is, instead of levying a few very large taxes on everyone, Colorado levies many small taxes on everyone. Almost anything and everything that can be taxed is, just at a relatively small amount.
The bottom line is this: to get the real story on Colorado’s tax burden, check out our Issue Paper, “How Colorado’s Tax Burden Ranks Nationally.” And the next time someone says we rank near the bottom in taxation, remind them that there is another half of the equation that they conveniently left out. Then they’ll thank you when they learn we are a healthy 26th in taxation. Just high enough to avoid dirt roads, starvation, and the apocalypse.