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With great fanfare last week, Republican Gov. Bill Owens and Democratic leaders of the legislature agreed to suppoert the Colorado Economic Recovery Act, which will be on the ballot this fall as Referendum C.
It doesn't violate TABOR, the Taxpayers' Bill of Rights written into our state constitution. TABOR requires a public vote to raise governmental income above a certain level based on monetary inflation, population growth and last year's budget. And that's what we're getting -- a public vote.
Nonethless, our governor has been condemned by various fire-breathers in his own party because he supports allowing us to vote on whether the state government should be allowed to spend money that would otherwise be refunded to us.
It would appear that we're capable of making that decision, especially as that referendum draws closer and we have more information. But in certain GOP circles, this means that Owens is committing an unpardonable act. He's more or less supporting a tax increase.
But as long as modern Republican orthodoxy opposes
anything that can be construed as a tax increase,
any reform is going to face some tough sledding.
Consider that Colorado has a bunch of enterprise
zones
that get special tax breaks.
Over the years, I've run across some other sweetheart tax deals. For instance, a billionaire got a sales-tax exemption. That was Phil Anschutz, after he bought the Denver & Rio Grande Western Railroad, then bought the Southern Pacific Railroad, and merged them.
He threatened to move some rolling-stock repair shops to another state, thus removing some jobs that paid pretty well, unless he could avoid paying sales tax on parts like locomotive motors. Fearing the loss of jobs, the state cut a deal.
Now the jobs are gone anyway -- Anschutz sold his railroads to the Union Pacific, which moved the work to other shops -- so the deal didn't accomplish much except to remind us peons were we stand. I've got to pay sales tax whenever I buy a printer toner cartridge for my business, but then again, I'm not a billionaire.
Another billionaire tax break came in 1998, when the City of Lakewood arranged for $195,000 in tax rebates for Gateway Computer. Jefferson County agreed to refund $300,000 of Gateway's taxes, and the State Economic Development Commission offered $550,000 in direct grants and loans -- that is, money from all Colorado taxpayers, including Gateway's competitors.
Gateway was then a $6 billion company. It seems to have
faded since then, but I haven't paid much attention, since
I don't patronize any company which thinks so little of its
customers that it Recommends Windows XP
home or
professional on new computers.
Those are just two tax deals that I remember, along with the enterprise zones. There are doubtless many more, and I brought this up once when I was chatting with Ken Chlouber, who was seeking another term in the state senate from this district.
Don't you think our state revenue system would be a
lot more fair if we got rid of all these special
breaks?
I asked him. Wouldn't that allow state and
local govenrnments to reduce the tax rates on everyone
else, and would thus be a tax decrease for most Coloradans?
I'm not talking about soaking the rich, just making them
live by the same rules as the rest of us.
Ken didn't answer, so I pushed it harder. Let's take
a hypothetical little town with an annual budget of
$100,000 for streets and parks and all that,
I said.
It has 99 households in houses worth $100,000 apiece,
and one rich guy in a $1 million house. And the rich guy
pulled strings to pay no local taxes. So the 99 are paying
$1,010 a year apiece in local taxes, and the rich guy is
paying nothing. Make the system fair, where everybody pays
what he should based on home value, and the normal
household's annual tax drops to $917.
Sounds about right,
he said, but somebody's
going to have to pay more.
I agreed. The rich guy who had hustled the system would now pay $9,170.
Then that's a tax increase for him, from zero to
$9,170. And I could never support a tax increase.
So, any effort to make our system more fair, to get rid
of the corporate welfare and tax breaks for billionaires,
can doubtless be construed as a tax increase,
just
as our govenor's agreement on a referendum is being
criticized as support for a tax increase.
If these
folks keep it up, the dreaded tax increase
might not
be quite so scary someday.
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