Modernizing Colorado's Tax System

The tax system should avoid giving special breaks that reward political clout, rather than economic or social merit.

The focus should be on the needs of those struggling to enter the middle class, along with those striving to stay in it, rather than across-the-board income tax cuts mostly benefiting upper-income earners, a category of taxpayers who have been doing well in recent years under current tax rates

To provide tax relief to Colorado's working poor and middle class, we should target special subsidies and tax breaks - loopholes that unfairly drain millions of tax dollars from Coloradans for purposes that are often not in the public interest.

To make matters worse, these giveaways actually hurt companies because they work against what it takes to succeed in the New Economy - innovation and competitiveness.

To reduce, redesign, and eliminate programs and policies that are not working or are no longer needed, a Colorado Commission on Tax Subsidies (CCTS) should be created to uncover these breaks, analyze their cost, and demonstrate who benefits from them to determine whether their continuance is in the public interest. For example, Colorado grants numerous sales tax exemptions that have no valid public purpose.

The CCTS would report to the legislature, which would vote on the continuation or repeal of each subsidy openly and on its merits (For cases where TABOR requirements apply, the legislature would be need to refer those measures to the ballot).

The generated savings would be plowed into state's sales tax relief - a highly regressive levy on Colorado's citizens, income tax relief for working Coloradans, a significantly expanded earned income tax credit, property tax relief for the elderly and research and development tax credits to create new job opportunities.

In addition to promoting innovation and competition, Colorado's middle class and those less fortunate will get a much needed tax break.