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Tax Argument May Come Down to Percentages

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File photo of a calculator and a bank statement. (Photo by Peter Macdiarmid/Getty Images)

File photo of a calculator and a bank statement. (Photo by Peter Macdiarmid/Getty Images)

Written by Dominic Dezzutti

The campaign behind the School Finance Act finally released this week the tax mechanism they will ask voters to approve to raise $950 million dollars to help finance the initiative. While any tax mechanism that raises that kind of money would be a tough sell, the particular mechanism chosen will sound particularly tough when described in percentages.

That might be just one of many challenges the campaign will run into throughout the election. But the key element that makes this a bigger problem is that it is very easy to make the percentage argument, and fairly difficult to explain the pro side of the issue.

Let’s first look at the facts as we know them. The proposed ballot issue would raise $950 million dollars through an increase of the state income tax. Right now, the state income tax rate is 4.63 percent. The School Finance Act would raise that rate to an even 5 percent for all income earned up to $75,000 a year. For all income earned above $75,000 a year, a 5.9 percent tax would be collected.

So that means if you make $100,000 annually, the first ¾ of your income will be taxed about 8% more than it is currently, but that last $25,000 will be taxed about 27% more than it is now.

See what I mean? 8% doesn’t sound that bad, but 27% is a big jump. And frankly, with that kind of a percentage jump, it’s easy to see that upper middle class and upper class of Colorado will be paying for a great deal of this education package.

Now, as the old saying goes, there are lies, damn lies and statistics. Everyone knows that numbers can be twisted in about any way that you can imagine. But we also know that it only takes one good hook for an opposition campaign to derail a ballot issue.

It’s clear to me that the opponents cannot merely talk percentages, especially when looking at the issue of education. But the bumper sticker idea that many Coloradans will see a good deal of their income taxed 27% more than it was this year should make an impact.

One is also forced to wonder if an across the board tax increase would be more palatable to the majority of voters. I certainly understand the argument that people that earn wages close to the poverty level should be spared some of the pain of the tax increase. However, it’s hard to say that particular idea is the theory behind setting the jump at $75,000.

Where the tax rate jumps sets the argument not at a point of helping to ease the pain for lower wage earners, but rather leaning on the upper class to improve education funding. That may very well be an argument that can sway voters and may be the winning strategy. But that doesn’t mean it will be an easy sell.

The true test of the viability of proposed tax mechanism will be how quickly movers and shakers in Colorado decide to line up behind it or to stay quiet. With the clock ticking, the proponents cannot afford to let major allies sit on the sidelines for long. Signatures need to be secured, campaign messaging needs to be honed and significant money needs to be raised. With Election Day only a little over four months away, getting some significant voices of support speaking out right about now will help to set a tone conducive for the proposal.

And of course, if radio silence from major players rules the day in early July, it will be just one more hurdle for this campaign.

It will be interesting to see how a little thing like percentages affects the early part of this campaign. Maybe I’m simply reading the math one way and everyone else will read it another way. It wouldn’t be the first time.

But percentages affect our decisions every day at almost any grocery or department store. I wouldn’t be surprised if percentages affect us on Election Day too.

About The Blogger

- Dominic Dezzutti, producer of the Colorado Decides debate series, a co-production of CBS4 and Colorado Public Television, looks at the local and national political scene in his CBSDenver.com blog. Read new entries here every Monday, Wednesday and Friday. Dezzutti writes about federal, state and local matters and how our elected leaders are handling the issues important to Colorado. Dezzutti also produces the Emmy winning Colorado Inside Out, on Colorado Public Television.

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