Chanting “Tax the rich!” on the steps of the Colorado Capitol Tuesday, a coalition of advocacy groups kicked off their signature gathering effort to place a measure on the 2026 ballot that would raise taxes on higher earners. 

In what supporters are calling a graduated income tax, the measure would eliminate Colorado’s flat income tax rate in favor of a tiered system that would reduce taxes for some of the state’s lowest earners, while ratcheting up taxes on those making $500,000 or more annually. 

“We are giving voters a chance to say ‘Yes’ to cutting taxes for the 97% of Coloradans making less than $500,000 a year, to increasing taxes on only the wealthiest Coloradans and largest corporations and raising $2 billion a year for education, health care and child care,” said Chris deGruy Kennedy, a former state representative and president and CEO of the liberal-leaning think tank Bell Policy Center, who is helping spearhead the policy. 

Conservative groups have already mounted opposition to the proposal, which they attempted but failed to keep from clearing the state’s title board earlier this year. The title board decides whether citizen proposals meet the requirements to be considered on the ballot. 

Colorado is currently one of roughly a dozen states with a flat income tax, and has one of the lowest rates in the country at 4.4%, according to the Tax Foundation. 

Under the graduated tax proposal, the tax rate would be cut to as little as 3.7% for someone’s first $25,000 of annual income, with income between $25,001 and $100,000 being taxed at 4.2%. Income between $100,001 and $500,000 would still be taxed at 4.4% 

The rate would increase for higher earnings, with income between $500,001 and $750,000 taxed at 7.4%, while an income range of $750,001 to $1 million would be taxed at 7.9%. Income above $1 million would be taxed at the highest rate, 8.4%. 

Supporters say they are preparing for pushback on the proposal. 

The libertarian-leaning Independence Institute pushed against a graduated income tax when it was initially proposed last fall, arguing that the state’s low flat tax rate has made it attractive for businesses, entrepreneurs and skilled workers from across the country. 

The graduate income tax is supported by a consortium of 19 groups, including child and immigrant advocacy organizations, health and anti-hunger groups and local government leaders. Supporters say the measure is needed for Colorado to keep up with demands for social programs at a time when ongoing budget crises are forcing the state to pull back spending, which is being compounded by cuts to government services at the federal level. 

Colorado lawmakers, who are in the midst of their legislative session, which began in January, are currently debating how to close a roughly $850 million budget gap in the upcoming fiscal year’s spending plan. They’re weighing cuts to Medicaid and other state programs after already having to close billion-dollar deficits last summer and spring. 
DeGruy Kennedy blamed the Taxpayer’s Bill of Rights, or TABOR, as the reason for the state’s grim budget environment, saying it has artificially limited Colorado’s ability to invest tax dollars into critical services. TABOR is an amendment to the state constitution approved by voters in 1992 that, among other things, limits state government revenue growth to the rate of population growth plus inflation.

“And to make matters worse, Donald Trump’s Congress passed a budget bill last year that gave massive tax cuts to the wealthy and the biggest corporations, all paid for by slashing funding for health care and food assistance programs,” deGruy Kennedy said, referring to Trump’s One Big Beautiful Bill Act, which is slated to cut Medicaid funding by about $1 trillion over the next decade. 

Jennifer Remington, a Jefferson County resident whose spinal cord injury 16 years ago left her body paralyzed, spoke during Tuesday’s rally about her reliance on Medicaid, which pays for her at-home care. 

“These services provide the personal care assistance I need for the parts of my daily life that my body can no longer do on its own,” Remington said, adding that it allows her to live at home with her children rather than a nursing home or institutional care. 

“Programs like Medicaid are not an abstract line item in the budget; they are lifelines,” she said. “… By supporting this graduated income tax initiative, we can make sure that the next person whose life changes overnight still has the support they need to rebuild it.” 

Under the graduated tax proposal, the state would be able to keep the revenue it collects from the new tax rates, even if it is above the TABOR limit. That revenue would serve as a dedicated funding stream for public schools, health care and child care. 

Colorado would still be required to refund revenue it would otherwise collect under the existing income tax rate if it exceeds TABOR. Supporters of the graduated tax measure say doing so will preserve TABOR refunds. 

Tamara Pogue, a Summit County commissioner who serves as chair of the nonprofit group Counties and Commissioners Acting Together, said the additional funding will give the state the support it needs to reduce strains on local governments, which are currently being asked to do more with less. 

Pogue said the challenges may look different depending on the community. She gave the examples of rural areas where fragile health care systems and a lack of public funding can have a ripple effect throughout the entire local economy, and rural resort areas, like hers, where the tourism economy — while vital for the state — puts pressure on housing, infrastructure and the workforce. 

“I’m one of many commissioners in this state who wake up to phone calls and emails about what people in our communities lack, and then go to bed without the resources to solve those very same problems,” Pogue said. 

The measure still has a long way to go before it can be placed in front of voters. Supporters must gather upwards of 125,000 signatures to get the measure on the ballot this November, a process that can cost millions. 

Colorado Democrats are also pushing forward a separate measure to refer a ballot question to voters that would raise the TABOR cap by potentially $2 billion annually for the next decade, with the additional money being channeled into K-12 schools. 

That proposal, which must first clear both chambers of the legislature for it to be placed on the ballot, is led by the Colorado Education Association. Republicans have vowed to oppose it, seeing it as an attack on TABOR, which they say keeps government spending in check and returns more money to taxpayers. 

Colorado is among a growing list of states considering ideas to tax wealthier earners. 

Lawmakers in Washington this month passed what’s been referred to as a “millionaires tax” that imposes a 9.9% tax on annual income over $1 million. In California, supporters of a wealth tax are seeking to place a measure on the November ballot that would impose a one-time 5% tax on residents with net worths over $1 billion.