Specifically addressing Democrats, Gov. Jared Polis asked the Colorado legislature earlier this month to seriously consider slashing the income tax rate, a key campaign promise that his own party has perennially resisted.  

“I know some Democrats in the past have been skeptical of reducing our income tax rate, but cutting the income tax rate is the most effective way to further our economic growth,” the governor said during his state address, when he invoked both former presidents John F. Kennedy and Barack Obama to argue that this tax cut would spur economic growth.

A new report from the Independence Institute said Colorado could, indeed, lower its income tax rate to 3.25% if Polis “fully implemented” his tax agenda, which would translate to more than $1,000 in savings per income tax filer.

To do that, Polis and lawmakers would need to eliminate $1.8 billion in “special interest tax giveaways” and use that money, along with $1.79 billion in Taxpayer’s Bill of Rights surplus to lower the income tax rate, the report said.

The report defined “special interest tax giveaways” to mean “tax expenditures” – deductions, exemptions, credits, and other special tax benefits.

“Unfortunately, Polis has made no progress in advancing either part of his tax reform agenda through the legislature, neither reducing special interest tax benefits nor cutting the income tax rate using TABOR surpluses,” the report said. “On the contrary, his policies have increased special interest tax benefits on net, diminishing the state’s ability to cut taxes for all.”

In a statement, the governor’s office said it has yet to read or fact-check this report.

“But the governor welcomes any information that helps achieve his goal of cutting the income tax rate without reducing funding for schools or other key services by one dime,” a spokesperson said. “Gov. Polis supports income tax cuts to prevent the over collection of taxes that leads to a TABOR surplus, and he also supports eliminating corporate giveaway tax expenditures to further reduce the income and sales tax rates.”

The report said legislation passed since the governor took office expanded “special interest tax” benefits on net for the current fiscal year by roughly $450 million, which the group says translated to $130 per income tax filer.

The report added that, even with reductions in TABOR revenue, the projected surplus for the next fiscal year could still buy down the income tax rate from 4.40% to 3.82%, which would translate to savings of about $510 per tax filer.

And the state could do so without affecting state spending, the report said.

And had the legislature not modified tax expenditures last year, the governor and lawmakers would have enough surplus to slash the income tax rate to 3.76% also without affecting state spending.

Editor’s Note: Jon Caldara, president of the Independence Institute, is a regular columnist of Colorado Politics and the Gazette newspapers.