A petition drive to put on the November ballot in Colorado a proposal to establish a permanent graduated income tax is currently being reviewed by state officials.
Bathed in controversy, what is known as Initiative Number 195 would, if approved, establish a graduated income tax, versus the current flat tax, on individuals and businesses. Supporters contend that not only would the new form of taxation be more equitable, but it will also bring in tens of billions of additional dollars for needed state services.
At its essence the proposal would replace Colorado’s more than 40-year-old flat 4.4% tax rate with a graduated tax formula that will reduce taxes for upwards of 97% of the state’s residents.
The new graduated tax would vary from 3.7% to 8.4% beginning next year. Revenue from Imitative 195 would be used to provide funding for K-12 education, early childhood programs, and healthcare, among other services.
Initiative 195, according to the group Protect Colorado’s Future, is a “direct response to Colorado’s budget crisis, caused by state revenue limits and federal budget cuts.”
While analysts have said that the proposal, if approved by voters, would require upper income residents to pay more and a higher percentage of taxes, opponents, notes the Bell Policy Center in an analysis, will “cause higher earners and businesses to leave the state or discourage new high-income residents and businesses from coming into Colorado.”
The loss of higher income earners and businesses, remarks the Denver Gazette, “would mean a tremendous loss of tax revenue even as the measure raises taxes.”
June 25, 2026
By Garry Boulard
Colorado Initiative 195 poster
