Colorado Ballot Will Ask Voters to Replace 4.4% Flat Tax With Graduated System

Overview

• The state has qualified Proposed Initiative 195 for the November general election ballot to amend Colorado’s constitution and end the 4.4% flat income tax.
• If approved the measure would create graduated rates, raise taxes on individuals and corporations with income or net profits above $500,000, and cut taxes for most other filers.
• A nonpartisan Legislative Council Staff fiscal summary estimates the change could boost state revenue by roughly $2 billion annually by fiscal year 2027–28, with a top projection of $2.7 billion.
• Supporters say the revenue must be spent on K‑12 education, healthcare and childcare and that about 97% of residents would see lower taxes, while opponents warn higher rates could drive wealthy people or businesses out of Colorado.
• Opposition has produced a competing ballot measure that would cap the income tax at 4.4%, and experts say voters and courts may need to resolve how any revenue changes interact with the Taxpayer’s Bill of Rights.