Proposition 136: Colorado Establish 4.4% Cap on Individual and Corporate Income Tax Rates Initiative

The DMCC Board voted to support Proposition 136, which would establish a statutory cap on Colorado's income tax rate at 4.4%.

This measure will help provide greater tax certainty and affordability for Colorado residents and small businesses while reinforcing the state's economic competitiveness. This measure is in direct response to efforts underway to eliminate Colorado’s flat income tax.

Proposition 136 would limit Colorado's individual and corporate income-tax rates to 4.4%, the current rate, beginning in the specified implementation period.

Why Vote YES?

Colorado should not replace a predictable tax system with an ever-increasing income-tax structure.

A 4.4% ceiling provides taxpayers and businesses with greater certainty and establishes a clear constitutional or statutory guardrail against higher rates, depending on the interaction with other measures.

Proposition 136 is particularly important because it directly addresses the competing tax policy represented by Amendment 87.

Under Colorado's election rules, if conflicting provisions are both approved, the conflicting provisions are resolved according to which measure receives the greater number of affirmative votes.

Position: Keep Colorado's income-tax rate at or below 4.4%. Vote YES.

This is the antidote for Amendment 87 (“Graduated Income Tax,” above). Prop 136 would cap the individual and corporate income tax rate at the current level of 4.4% for all. With both measures on the ballot, if they both pass and Prop 136 gets more YES votes than Amendment 87, the top tax rate stays capped at 4.4%, but Amendment 87’s slightly lower tax rates under $100,000 of income would nonetheless take effect. If Amendment 87 gets more YES votes than Prop 136, then nothing in Prop 136 takes effect and all of Amendment 87’s measures take effect, especially its top rate of 8.4%. All the more reason to vote for Prop 136.

Colorado already has a flat tax that benefits the richest individuals and prevents all of us from thriving. Proposition 136 would cap personal and corporate taxes at 4.4%. This proposition is also an attempt to compete with Amendment 87, which seeks to lower taxes for 97% of Coloradans. We recommend voting NO on this proposition. - Prop 136 weakens our ability to create a fairer tax system. A flat rate of 4.4% for everyone sounds fair on the surface, but it isn’t. The lower your income, the greater portion of your income goes for the basics. For example, if your income is $39,000, at 4.4%, you have $37,284. From that amount, you must pay for gas and food, along with sales taxes, mill levies, and other local fees. If you have an income of $500,000, you still have $478,000 to pay for the same goods and services along with sales and local taxes. - Prop 136 prevents us from raising revenue to address the rising costs of education, healthcare, and child care. At the same time, it protects high income individuals and corporations from paying their fair share. - Prop 136 limits our legislative leaders’ ability to respond to changes without being able to consider the state's other pressing needs, locking in reduced budget flexibility for years to come. - Prop 136, funded by a dark money group, is unfair. Tell the dark money funders NO on Prop 136. Vote YES on Amendment 87, a citizen-led measure. We need fairer taxes in Colorado. This income tax cap locks in lower taxes for millionaires and large corporations. This leaves delivery drivers and roofers paying the same rate as millionaires and large corporations but with much less disposable income.

We encourage voters to vote NO on Proposition 136. We believe that the current rate and flat tax system place too much of the tax burden on low and middle income Coloradans, and a graduated income tax makes much more sense for the Colorado of today. Colorado is one of the most competitive economies in the country and with a graduated income tax that will not change, nor will high income residents or large businesses flee the state as opponents suggest.