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Outbyte PC Repair FREERepair Windows errors before they cause bigger problemsFix Now →Outbyte Driver Updater FREEFix the driver behind crashes, sound loss and screen glitchesFind Drivers →Colorado’s Amendment 87 would replace the state’s flat income tax with graduated individual and corporate rates starting in tax year 2027. The claim that it could drive employers out of Colorado is an argument made by opponents, not a quantified forecast: the official ballot materials do not estimate how many businesses might move or how many jobs could be lost.
What is Amendment 87, and why is it also called Initiative 195?
Amendment 87 is the label used on the Colorado General Assembly’s 2026 ballot page. The measure’s text and legislative analysis also identify it as Initiative 195. Readers looking up official documents may encounter either name. Colorado General Assembly ballot measures Initiative 195 materials
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How would the proposed graduated income tax work?
The proposal would apply graduated rates to individual and corporate income beginning in tax year 2027. Individual rates are marginal: each rate applies only to the portion of taxable income within its bracket, not to a taxpayer’s entire income once a threshold is crossed.
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| Taxable income bracket | Proposed marginal rate |
|---|---|
| First $25,000 | 3.7% |
| $25,000 to $100,000 | 4.2% |
| $100,000 to $500,000 | 4.4% |
| $500,000 to $750,000 | 7.4% |
| $750,000 to $1 million | 7.9% |
| Above $1 million | 8.4% |
For example, under the proposed schedule, a taxpayer with $600,000 of taxable income would pay 7.4% only on the portion above $500,000; the lower portions would be taxed at the rates assigned to their respective brackets. The official ballot analysis says taxpayers below $500,000 would generally see lower income-tax amounts, while taxpayers around $500,000 and above would see increases. These are general descriptions in the ballot analysis, not a substitute for an individual tax calculation. Initiative 195 text and ballot analysis
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Corporate income tax
The measure also sets graduated corporate rates. Its text applies the proposed schedule to Colorado net income of domestic and foreign C corporations and combined groups doing business in Colorado. That describes which income the tax would cover; it does not show whether any particular company would relocate. The official materials cited here do not provide the corporate rate schedule’s figures in the cited summary. Initiative 195 text
How much additional revenue does the state estimate?
Colorado Legislative Council Staff’s 2026 fiscal analysis estimates additional state income-tax revenue as follows. The figures are estimates, not guaranteed collections; the Blue Book says actual revenue may differ with economic conditions and other factors. 2026 fiscal analysis and ballot information
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| Budget year | Estimate | What it represents |
|---|---|---|
| 2026–27 | $958.4 million | Estimated additional revenue, reflecting a half-year impact for tax year 2027. |
| 2027–28 | $1.972 billion | Estimated additional state income-tax revenue. |
| 2027–28 | Up to $2.7 billion | Maximum estimated revenue and spending increase accounting for potential forecast error; this is not the central forecast. |
| One-time administrative cost | $98,000 | Estimated additional Department of Revenue spending to administer the rate change. |
The proposal directs additional revenue to K-12 education, health care, and early childhood care and education. It also provides for public reporting and an annual audit. Initiative 195 text and ballot analysis
Would the graduated tax make businesses move out of Colorado?
The official Blue Book presents the departure concern as an argument against Amendment 87: “Higher tax rates make Colorado a less competitive place to start and grow a business, and may encourage some high earners to leave the state entirely.” It also argues that relocations by businesses and high earners could mean lost jobs. This is the collective opposition argument in the state’s voter guide—not a state finding or an official estimate of likely departures. Colorado 2026 State Ballot Information Booklet
The ballot materials do not quantify how many employers or high earners would leave, estimate resulting job losses, or establish that Amendment 87 would cause relocations. The proposed corporate tax applies to Colorado net income for the specified corporations and combined groups; that legal tax scope alone cannot establish how businesses would respond. The scale of any employer departure therefore remains unresolved in these official materials.
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What can voters conclude from the available figures?
- The measure would change tax rates, with the individual schedule’s largest increases applying to income above $500,000.
- The official central revenue estimate for budget year 2027–28 is $1.972 billion; the separate $2.7 billion figure is a maximum estimate that accounts for possible forecast error, not the central projection.
- The state’s voter guide describes potential loss of businesses and jobs as an opposition argument, but provides no quantified relocation forecast.
- These materials establish the proposed tax design and the state’s fiscal estimates, but do not determine the proposal’s effect on employer location decisions.
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