What Amendment 87 would change
Colorado's single 4.4% rate would give way to a graduated setup, with higher rates only applying to income above set thresholds. Brackets would start for households once taxable income exceeds $500,000, and income over $1 million would face an 8.4% rate. The measure covers individuals and corporations and would revise the Taxpayer's Bill of Rights, or TABOR, to allow tiered rates.
According to a state analysis, households with income exceeding $1 million are projected to pay an average of $26,085 more. It also finds taxpayers with state taxable income below $510,834 would likely see a cut. Colorado counts roughly 102,228 taxpayers with income above $500,000.
Backers argue the change is modest because it applies to marginal income. The new revenue would be directed to a dedicated fund supporting K-12 education, healthcare and childcare, with an annual audit to verify how it is spent. Amendment 87 survived a court challenge last week and heads to voters.
Who is for it and who is not
Kathy White, who serves as the Colorado Fiscal Institute's executive director, said, "This is a fair tax." "It asks the wealthiest 3% of people and the most profitable corporations to do a little more, and it cuts taxes for the 97% of average working families." Aspen Mayor Rachael Richards supports the plan, pointing to deteriorating roads, a gasoline tax that has not increased in more than three decades due to Colorado's restrictions on tax hikes, and a looming lapse in federal Medicaid funding. She added that many of Aspen's wealthier homeowners claim primary residences elsewhere and said the risk of departures is "not a real concern for me." Boulder Mayor Aaron Brockett calls graduated rates more progressive than a flat levy and says the increase is marginal for higher earners, while adding, "We value having them here."
Business groups and the governor oppose it. "This is just one more thing that's going to drive these businesses either to leave or just not come here," said Loren Furman, chief executive officer of the Colorado Chamber of Commerce, citing growing rules and regulations over the past 10 to 15 years. The chamber says that from 2019 through 2025 there were nearly 100 corporate relocations or lost prospects to other states, including Palantir Technologies Inc. shifting its headquarters from Denver to Miami and TIAA consolidating roles at a new hub outside Dallas.
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Governor Jared Polis, a term limited moderate Democrat, warns of broader economic effects. He argued, "The substance of the issue is that Amendment 87 would raise taxes by over $2 billion, much of it from doubling the taxes on small and mid size businesses, all without guaranteeing how much will go to education and classrooms." Republican gubernatorial candidate Victor Marx opposes the proposal. Democratic candidate Phil Weiser, the attorney general, has not taken a position because of his office's litigation role.
Will higher taxes trigger exits?
Curtis Bankers, a Denver estate and tax planning attorney, says clients are already asking about moving if the amendment passes, and many affluent Coloradans own homes in lower tax states such as Wyoming, Utah and Arizona. "All of my clients would be affected by this," Bankers said. "The main takeaway is they're all very worried." Tech investor Dan Caruso argued that "Capital is mobile, and so are the people who direct it" in a Denver Gazette editorial.
Yet the evidence on tax driven moves remains limited. A 2016 study concluded tax flight happens "but only at the margins of statistical and socioeconomic significance." Massachusetts' 2022 millionaires tax has brought in more than expected. And while billionaires like Sergey Brin and Larry Page left ahead of a California wealth tax vote, Nvidia CEO Jensen Huang has said he has no issue with it, and Meta set up a fresh series of nonvoting stock for Mark Zuckerberg to keep him in state.
Even with the change, Colorado's rates would remain below higher tax peers on the coasts. Many relocations are about lifestyle, not line items. "They have season Bronco tickets," said White of the Colorado Fiscal Institute. "Their kids go to a great school down the street and all their friends are here. There are so many things that tie people to their place."
The broader Western tax fight
The question in Colorado sits within a larger regional trend about what the wealthiest should pay and how far states can push without losing revenue sources. California voters are considering a one time 5% levy on billionaire wealth, and Washington voters will weigh a repeal of the recently enacted 9.9% levy on yearly income above $1 million.
Adopted in the 1990s, TABOR restricts the amount of revenue the state is allowed to keep and use. Amendment 87 would modify TABOR to allow brackets and is projected to generate about $2 billion per year once fully phased in, directed to K-12 education, healthcare and childcare with annual audits. For your portfolio, that means a potential shift in Colorado's budget mix, decisions by high earners on residency, and signals for sectors tied to public spending - while most households would get a cut and income above $1 million would face an 8.4% rate.
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