{"id":30552,"date":"2023-11-20T06:30:00","date_gmt":"2023-11-20T13:30:00","guid":{"rendered":"https:\/\/dh.durangoherald.com\/tj\/how-democrats-are-using-colorados-special-session-to-steer-tax-relief-toward-the-working-poor\/"},"modified":"2023-11-20T13:30:00","modified_gmt":"2023-11-20T13:30:00","slug":"how-democrats-are-using-colorados-special-session-to-steer-tax-relief-toward-the-working-poor","status":"publish","type":"post","link":"https:\/\/dh.durangoherald.com\/tj\/how-democrats-are-using-colorados-special-session-to-steer-tax-relief-toward-the-working-poor\/","title":{"rendered":"How Democrats are using Colorado\u2019s special session to steer tax relief toward the working poor"},"content":{"rendered":"\n

\"Visitors
Visitors stand on the west steps of the Colorado State Capitol on April 23, 2023, in Denver. (David Zalubowski\/Associated Press file)<\/span>David Zalubowski<\/span><\/figcaption><\/figure>\n<\/p>

Colorado Democrats tried tax relief the governor\u2019s way. Now they\u2019re doing something closer to what progressives actually want.<\/p>\n

The Colorado House of Representatives on Saturday passed a measure largely along party lines that would double a state tax credit for low-income working families for one year, a key piece of Democrats\u2019 plans to redistribute tax breaks from higher earners to those in financial need. The measure would redirect $185 million that would otherwise be refunded to all Coloradans under the Taxpayer\u2019s Bill of Rights.<\/p>\n

\u201cIt ensures that we are targeting necessary relief to the people who need it the most,\u201d said Rep. Jenny Willford, D-Northglenn, one of the bill\u2019s sponsors.<\/p>\n

The proposal \u2013 and its lockstep opposition from conservatives \u2013 reflected the divergent lessons legislative Democrats and Republicans took from the failure of Proposition HH at the ballot box.<\/p>\n

Progressives felt the sprawling property tax measure written primarily by Democratic Gov. Jared Polis offered too much tax relief to wealthy homeowners and too little assistance to low- to moderate-income Coloradans \u2013 something they\u2019ve looked to change during the special session.<\/p>\n

\u201cThe plight of those who cannot afford to own homes in the first place is also deserving of a special session,\u201d said Rep. Javier Mabrey, D-Denver. He said the rent increases Coloradans face are \u201cfar more devastating\u201d than any increase in property taxes homeowners might experience this year.<\/p>\n

Republicans, meanwhile, took a different message from voters: Leave taxpayer refunds alone.<\/p>\n

\u201cThe only reason we\u2019re in this room is because the voters rejected Prop. HH,\u201d Rep. Scott Bottoms, R-Colo. Springs, said. \u201cThey saw through the scam. They said do not touch our TABOR funds. Now this bill literally touches TABOR funds \u2013 exactly the opposite of what the voters of Colorado voted to not do.\u201d<\/p>\n

The measure, House Bill 1002, represents a major expansion of the Earned Income Tax Credit, a tax break worth up to thousands of dollars that 430,000 Coloradans claimed in 2022. It passed 39-20, with all 19 Republicans opposed and now heads to the state Senate for consideration.<\/p>\n

The House also gave preliminary approval to a separate measure providing $30 million for rental assistance to households facing eviction.<\/p>\n

The state\u2019s EITC supplements the federal program of the same name, which primarily benefits low-income workers with children. The federal Earned Income Tax Credit climbs with a person\u2019s earnings in order to incentivize employment \u2013 but only up to a point. Research shows it\u2019s an effective anti-poverty tool that\u2019s associated with better nutrition and academic achievement in low-income children.<\/p>\n

The credit tops out at around $7,400 for families with three children making $17,000 to $28,000. The amount shrinks with higher earnings and with fewer children. No one making more than $63,400 qualifies for assistance.<\/p>\n

Because the credit is refundable, it goes beyond reducing the taxes people owe. Families who pay less in taxes than the credit is worth receive a payment back from the state when filing their taxes.<\/p>\n

Today, the state gives qualifying workers a refundable credit worth 25% of the federal tax credit. Under the bill, the state would provide 50% of what people receive through the federal credit in the 2023 tax year, an increase of up to $1,350. It would be the largest state-level tax credit of its kind, according to the Urban Institute, a policy research group.<\/p>\n

Democrats argue the measure, which still needs approval in the Senate, keeps with the spirit of TABOR,\u00a0swapping out one form of tax refund for another. The TABOR cap in the state constitution limits the annual growth in government revenue to the rate of inflation plus population growth. Any money collected over the cap has to be refunded to taxpayers.<\/p>\n

\u201cWe as a Legislature have the constitutional right to reallocate TABOR surplus to where it\u2019s needed most, and that\u2019s what we\u2019re doing,\u201d said Rep. Lorena Garcia, a Denver Democrat who has criticized the Legislature\u2019s property tax relief plans as being too geared toward the wealthy.<\/p>\n

Democrats said the measure would reduce TABOR refund checks by about $50 per person. But when combined with another measure being debated in the special session that would give everyone equal refund checks, Coloradans making under $99,000 would still get more than they do under current law. If both measures pass, all taxpayers would receive about $800 next year, or twice that for joint filers. Currently, refund checks are distributed in six tiers according to income, with higher earners getting more money back.<\/p>\n

Conservatives blasted the measure as unfair to middle-class workers who make too much to qualify for the EITC.<\/p>\n

\u201cLet\u2019s give (Coloradans) clean tax cuts, instead of picking winners and losers \u2013 taking money from people who are by no means rich, who are also struggling to make ends meet,\u201d Rep. Gabe Evans, R-Fort Lupton, said. \u201cWe heard a lot of conversations about \u2018Oh this is being paid for by the rich.\u2019 No, this is being paid for by everybody who is above the Earned Income Tax Credit cutoff levels.\u201d<\/p>\n

Nonetheless, some Republicans supported expanding the EITC as recently as this spring, when the General Assembly increased it to 38% of the federal level for the 2024 tax year. That measure was funded with $150 million from the state\u2019s TABOR surplus.<\/p>\n

During a Friday committee hearing, lawmakers heard from a number of working mothers who currently use the credit to buy clothes, books and food for their children. One, who gave testimony remotely, was interrupted by the babbling of a small child. Another, Alejandra Montes, relied on a Spanish translator to deliver her message.<\/p>\n

To her, it\u2019s the current system that\u2019s unfair, giving refund checks to those who don\u2019t need them.<\/p>\n

\u201cThey already have the money to cover the needs that we can\u2019t,\u201d she said, through the translator.<\/p>\n

Colorado Sun: The Colorado Sun is a reader-supported, nonpartisan news organization dedicated to covering Colorado issues. To learn more, go to coloradosun.com.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

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