If anything is holding Colorado’s business community and economists back from paroxysms of despair, it is the realization that whatever else might happen, there yet exist a few systemic checks tethering the state to fiscal solid ground – the balanced budget requirement, the Taxpayer’s Bill of Rights, and the flat income tax.

There hasn’t been much of a concerted effort to do away with the balanced budget, as an argument in favor of the state spending more than it takes in struggles for a public constituency. But the contempt which the left feels for the limitations of the other two provisions is harder to suppress, and it is therefore perfectly reasonable to expect some effort to revamp the state’s tax structure.

Not all reforms are injurious; the bi-partisan effort to repair and simplify the state’s labyrinthian sales tax system is gaining significant traction and is seeing much-needed progress this session. But ideologically-driven tax changes, geared less toward simplification and more toward a redistributive function, are the stuff of economic nightmares.

There is not much indication of where the new administration wishes to take tax policy; we know, historically, that the governor is in some ways sympathetic to supply-side economic teaching – that reducing the overhead on business is the key to economic growth; and that he concurrently possesses a distaste for tax “expenditures,” the curious term used to describe mechanisms in tax policy to allow individuals and businesses to keep more of their money. That the tax code should not be used to manipulate behavior is an eminently defensible position, but it is vulnerable to interpretational latitude; is there, for instance, any behavior or outcome which enjoys such universal sanction as to warrant the use of tax credits? The education of our young and provision of family leave would appear worthy candidates for the impartial efficacy of that mechanism. Similarly, distinctions ought to be made between those deductions and exemptions which simply offset the cost of doing business, and those which are designed to circumvent the marketplace. The latter are especially tempting to those who view with affection the functionality of government in the day-to-day operation of the economy.

None of which offers any concrete insights as to what may yet await the state’s tax structure. We do know of the left’s engrained antipathy towards structural limitations on government encroachment, and the repeated and ongoing attempts to repeal TABOR – either piecemeal, or in one fell swoop as a ballot initiative. But what else might be floating about?

With Colorado’s newfound affection for deferring to other states on public matters it may be worthwhile to turn a fearful gaze toward Illinois. This month, that state’s Democratic Governor, J.B. Pritzker, unveiled his “fair tax” proposal. Illinois currently imposes a 4.95 percent flat income tax rate on its citizens, about the last contact with fiscal sanity left in the state. Pritzker’s plan would slightly reduce rates for taxpayers earning less than $100,000 – to 4.75 percent for those earning under $10,000, and to 4.9 percent between $10,000 and $100,000. Up to $250,000, the 4.95 percent rate stays the same, but above that it shoots up to 7.75 percent. The new top rate, for those making $1 million or more, would be 7.95 percent. As a Wall Street Journal editorial pointed out last weekend, the top rate on the $1 million earners is even worse than it looks, since it is to be applied to every one of those 1 million dollars, not just the marginal ones.

The Tax Foundation reports that the proposal would sink Illinois down to the bottom three among the ranks of states with the worst tax burdens. It doesn’t take much economic training or a heightened gift of foresight to predict the result – capital will flee the state, taking jobs and revenue with it.

It’s no wonder that Friedrich Hayek, in The Constitution of Liberty, described the progressive tax as “the chief source of irresponsibility of democratic action.” Pritzker’s proposal is about as clear an example as one can find of flogging a policy out of a bumper-sticker slogan – “soak the rich” – without thinking through the consequences.. Last year’s Amendment 73, blessedly defeated at the polls, was mainly an attempt to re-impose progressive income taxation on the state, and further attempts will undoubtedly be made. Attacks on TABOR must, yes, be confronted, opposed, and defeated, but we should be equally vigilant in protecting this third leg of Colorado’s economy.

Kelly Sloan is a political and public affairs consultant and recovering journalist based in Denver. He is also an energy and environmental policy fellow at Centennial Institute.