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Newsletter — Issue 52 — Wednesday, October 7, 2026
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This newsletter has been published by Engage Colorado.
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The Promise of Amendment 87 Will Be Broken
This Engage Colorado Newsletter reflects the personal opinions of Dan Caruso, written with the support of the Caruso Ventures team. The Ensuring Colorado's Innovation Future Coalition did not review and has not endorsed this Engage Colorado Newsletter.
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The Colorado legislature's own analysts project that Amendment 87 will raise $2 billion a year from the highest income earners and corporations. This promise will be broken.
Our political leaders are counting on that money. They will commit to new spending immediately. When the money falls short, the spending will continue. That is when they will look to every Coloradan for more taxes.
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87 and NN Will Lead to Higher Taxes for Nearly Every Coloradan
The last issue laid out the fine print. Amendment 87 strikes three protections from the Colorado Constitution: the requirement that all income be taxed “at one rate,” the limit on tax credits to refunds and credits the voters approved, and the ban on any “added tax” on income. Proposition NN removes the safety valve that returns over-collected revenue to taxpayers as TABOR refunds.
Together, Amendment 87 and Proposition NN give our political leaders new ways to raise tax revenue from every Coloradan.
When the $2 billion falls short, they will use those tools to make up the difference. And it will be most of Colorado's taxpayers who end up paying higher taxes.
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Why the $2 Billion Will Fall Short
If Amendment 87 passes, high-income earners and corporations will avoid Colorado. Some will leave. Some will never come. Many who stay will move investments, defer gains, and report less of their income here. The $2 billion our political leaders expect to collect will fall short, and the gap will grow every year.
We have watched this pattern play out. High earners and companies have been leaving the states with the highest income taxes — California, New York, and Washington — for states with more attractive tax policies: Texas and Florida, which have no income tax, and Arizona and Utah, which have low flat taxes. In a single year, California lost $12.9 billion in adjusted gross income and 209,000 residents on net, and New York lost $10.6 billion and 164,000. Florida gained $20.6 billion. Texas gained $5.3 billion and 111,000 residents.
Washington, which had no income tax at all, began taxing capital gains in 2022, raised that tax to 9.9 percent in 2025, and this year enacted a 9.9 percent tax on income above $1 million. In the first year of its capital gains tax alone, 5,875 more residents earning over $200,000 moved out than moved in.
Massachusetts is the example Amendment 87's backers point to. Its 4 percent surtax on income above $1 million, in effect since 2023, has brought in more than twice what the state projected — in a rising stock market. But the first year of IRS data after the surtax took effect shows Massachusetts lost a net $4.2 billion in income to other states in 2023. Earners above $200,000 accounted for 70 percent of that loss.
The full impact of migration shows up over time, and the long-term negative impact on Massachusetts will be profound.
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California Tried This
In 2012, California voters approved Proposition 30, raising income tax rates on the state's highest earners. The top rate climbed to 13.3 percent, the highest in the nation.
Stanford economist Joshua Rauh and his coauthor Ryan Shyu measured what happened next, in a study published in a peer-reviewed economics journal. Within one year, 45 percent of the new revenue expected from top earners had disappeared. Within two years, 61 percent was gone.
Some of those high earners left California. Far more stayed and reported less income there — moving investments, deferring gains, restructuring how they were paid. Either way, the revenue never arrived, and the gap grew with time.
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The Warning Signs Are Already Appearing in Colorado
The rhetoric and actions of Colorado's political leaders increasingly follow California's path, and the market has noticed.
In July, Colorado dropped 14 spots in CNBC's 2026 Top States for Business ranking, from 11th to 25th.
In the Milken Institute's 2026 ranking of America's best-performing cities, every large Colorado metro fell. Denver dropped from 29th to 70th. Boulder fell from 41st to 132nd, and Fort Collins from 21st to 115th — two of the five biggest declines in the country.
If Amendment 87 passes, Colorado will be sending founders, investors, and employers the clearest signal yet.
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Who Foots the Bill
If Amendment 87 passes, spending will increase. And when the $2 billion a year doesn't show up, the rest of Colorado's taxpayers will foot the bill.
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Your Vote and Your Signature
Please protect Colorado's future by voting no on Amendment 87 and Proposition NN.
Please also sign the Open Letter — addressed to Attorney General Weiser, Senator Bennet, Senator Hickenlooper, and Mayor Johnston — asking that they support Proposition 136 and oppose Amendment 87. Governor Polis has already signed it. More than 360 Colorado technology, business, and civic leaders have added their names.
Read it. Sign it. Then send it to three people who should sign it too.
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Ballots are in the mail. Election Day is November 3.
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If We Work Together, the Sky's the Limit
Colorado can be the most attractive innovation ecosystem in the world, and every Coloradan will share in the economic and cultural prosperity that results from being the world's leading geography for innovation. This is the Innovation Vision for Colorado.
But to have a realistic chance of achieving this vision, we must defeat Amendment 87.
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