Would raising taxes on high incomes hurt Colorado’s economy?
The questionable notion of ‘tax flight’ resurfaces
Colorado voters might be asked this fall to approve a graduated income tax that would lower tax rates for the vast majority of Coloradans while raising them for high-earning people and corporations.
A new study says that proposal, called initiative 195, would cause high-earning people and companies to leave Colorado rather than paying the higher tax rate. And that would mean the state would collect less money than expected.
But is that true?
The analysis, put out by a business-friendly think tank in the Denver area called the Common Sense Institute, contradicts not only what supporters say about initiative 195, but also the conclusions of nonpartisan, independent analysts that work for state lawmakers.
What’s more, this idea of “tax flight” has been disputed by a lot of economic research.
So I asked to interview someone from the Common Sense Institute last week, and initially they seemed open to a video conversation.
Then they said they couldn’t do video, but they could answer written questions.
So I sent them a couple of questions, but they refused to address the research that says they’re wrong about tax flight. I asked multiple times but they just ignored me and then stopped responding.
I’ve been a journalist for many years and I’ve covered a lot of reports like this. And I have to say, it raises some pretty big red flags that the Common Sense Institute either can’t or won’t defend the central thesis of this report.
And I thought it was important to share since this questionable idea of “tax flight” will likely be one of the main arguments that we hear in the coming months against the graduated income tax proposal.
NEED TO KNOW
🔬 Missy Woods, a former forensic scientist for Colorado’s state crime lab, pleaded guilty this week to criminal charges related to her manipulation of more than 1,000 DNA tests over nearly three decades at the agency.
Woods was criminally charged in 2025 after an internal investigation found she’d manipulated more than 1,000 DNA tests over nearly three decades at the agency.
She wasn’t necessarily fixing cases to get bogus convictions; it was more about taking shortcuts to make her job easier for herself.
Her mishandling of those tests raised doubts about the validity of convictions in cases she worked on – and the legal process to sort all that out could end up costing taxpayers millions of dollars.
Woods is 65, and facing the possibility of years-long sentences that could mean spending the rest of her life in prison, so she’ll likely ask the judge to give her a light sentence in exchange for admitting her guilt.
Still, Woods pleading guilty is important because it’s a step toward accountability and repairing the damage to the reputation of the state crime lab.
🛢️ The federal Bureau of Land Management said last week that it leased roughly 135,000 acres in Colorado for oil and gas drilling, bringing in more than $35 million that gets split between the federal and state government.
The public lands sale was one of the biggest ever in Colorado, and it went ahead despite formal protests by the state parks and wildlife agency and other groups that were concerned about environmental impacts.
The feds are planning even more sales later this year as part of the Trump administration’s efforts to make it easier and cheaper for oil and gas companies to lease public lands for drilling.
But new drilling operations would have to go through an environmental review before they’re allowed to start, and that will likely be a contentious process since these operations are facing increasing resistance in Colorado.
COMING UP
🤓 Next week’s newsletter will include a write-up based on a new video series focusing on K-12 education funding in Colorado.
When I did my recent series about Colorado’s state budget, a lot of you asked me about K-12 education funding. And that’s a really important topic because education is the second-biggest item in the state’s budget, after healthcare.
I’ve been reading up and talking to some experts to learn more about where the money comes from, what we’re spending it on, and how education funding choices affect schools. The first video is already out, and the next two will be coming out today and tomorrow, so stay tuned!