The effort to chisel away at the state income tax has gained steam in the Centennial State. Can voters and Governor Polis pull it off?

When an interviewer recently asked Colorado’s Democratic governor Jared Polis what the state’s income-tax rate should be, he answered without hesitation: “It should be zero.”

For many Coloradans, this came as no surprise: The effort to chisel away at the income tax has already gained steam in the state. Last year, voters reduced the tax with Proposition 116 — a ballot initiative that brought the rate from 4.63 percent to 4.55 percent. The Denver-based Independence Institute, where I work, led last year’s rate-reduction campaign, through its issue committee, and plans to advocate another tax cut next year. Yet, for reasons discussed in further detail below, those eying complete elimination of the income tax may have to take another approach.

The Value of Zero Income Tax

If Colorado were to adopt the governor’s recommendation, it would join eight other states with no income tax and become the third blue state boasting the status, alongside Washington and Nevada.

Eliminating the tax would provide an enormous direct windfall to Colorado households. In 2017, the average Colorado family paid $2,850 to the state in income tax. But the indirect benefits of economic growth and opportunity for residents should not be understated…read more.