What I like about the Colorado Center on Law and Policy and its merry band of Big Government enthusiasts is that they’re honest about their goals and apparently not afraid to see if voters share them, too.
The center this month filed a half-dozen variations of a ballot initiative that would toss Colorado’s flat income tax onto the rubbish heap and replace it with a graduated tax — not just any graduated tax, either, but one on steroids.
Overnight, Colorado’s tax code would become one of the most steeply progressive in the nation, topping out at 9.5 percent.
And in four of the initiative’s versions, the corporate rate would surge from 4.63 percent to 7 percent.
“We really feel like it’s time to start a more complete conversation about how to solve the budget crisis,” said Carol Hedges, who directs one of the center’s institutes.
It’s not that I’m a fan of these tax-hike plans. To the contrary. A high graduated tax will make Colorado even more susceptible to gyrations in revenue, according to the Washington-based Tax Foundation. And raising the corporate rate would be downright bizarre at a time when even President Obama concedes that the U.S. corporate tax burden, which will become the highest in the industrialized world once Japanese reforms go through, is ripe for easing.
Nor is extracting an additional $1.5 billion a year from the state’s private sector my idea of a sound economic development strategy, especially at a time when the income of many Coloradans has stagnated.
Still, give the liberals at the Center on Law and Policy credit. Rather than merely whine about the Taxpayer’s Bill of Rights, they’re willing to buck what are probably long odds at the polls. Not necessarily impossible odds, though. Oregon voters approved two new tax brackets for high earners just one year ago.
Unfortunately, many proponents of bigger government in Colorado prefer indirect — and patently illegal — approaches to raise more revenue, such as reclassifying taxes as fees. Or they rely on the assistance of sympathetic judges, as when the state high court approved a suspect change in the property tax formula.
By far the most imaginative legal assault on TABOR, however, is still lurking in the wings. A group of prominent lawyers that includes former congressman David Skaggs, former state Senate minority leader Mike Feeley and Herb Fenster plan to file a complaint in U.S. District Court in the near future challenging TABOR under Article 4, Section 4 of the U.S. Constitution, which guarantees “to every State in this Union a Republican Form of Government.”
“The practical basis for the lawsuit,” an explanatory sheet maintains, “is that Colorado is, in reality, no longer a representative democracy” because “TABOR has deprived the legislature of the power to tax . . . .”
To say this is a novel argument hardly does it justice. According to Fenster, there has “never been a case in which the federal courts have looked at an impediment to the functioning of a state legislature.” He’s quite certain, however, that the Founders would have been appalled by TABOR since they “all rejected the notion of popular democracy.”
The ability “to lay and collect taxes,” Fenster told me, is the pre-eminent sign of a representative body and the first enumerated power of Congress mentioned in Section 8.
Fenster makes an interesting case, but would the federal courts really dare strike down TABOR two decades after its passage? And if so, wouldn’t the ruling call into question the entire Progressive Era legacy of initiative and referendum that more than 20 states embrace?
If the enemies of TABOR would redirect even half of the energy they spend undermining it to playing by its rules, maybe they’d have a better chance of saddling us with the taxes they so avidly desire.
E-mail Vincent Carroll at vcarroll@denverpost.com.
