Colorado’s flat 4.4% income tax is on its way out after voters approved Amendment 87 on Nov. 3, replacing it with six brackets that run from 3.7% to 8.4% starting in 2027. The Associated Press called the race on Nov. 6, and the count remains unofficial. Proposition 136, a rival measure that would have capped the rate at 4.4%, was rejected.
The vote was close for days. On the morning of Nov. 4 the yes side led by about 31,000 votes among more than 2.3 million ballots counted, and Proposition 136 was trailing with about 47% yes. The new brackets cut the rate for the lowest earners, hold it for the middle and raise it sharply above $500,000 of taxable income.
For Colorado retirees the question is which bracket their taxable income lands in on the 2027 return. Filers with taxable income up to $100,000 will pay a lower rate on part of it, and filers between $100,001 and $500,000 pay the same 4.4% as now. The state’s official analysis says taxpayers under $500,000 would pay less, by up to $325 a year, while those above it would pay more.
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The six brackets, line by line
The legislature’s Blue Book analysis lists the rates by taxable income. Income up to $25,000 is taxed at 3.7%, $25,001 to $100,000 at 4.2%, and $100,001 to $500,000 at 4.4%. Above that the rate is 7.4% from $500,001 to $750,000, 7.9% from $750,001 to $1 million and 8.4% over $1 million.
Each rate applies only to the slice of income inside its bracket. That is where the $325 ceiling on savings comes from: 0.7 points off the first $25,000 is $175, and 0.2 points off the next $75,000 is $150. A filer with $25,000 of taxable income saves $175, and anyone at $100,000 or more saves the full $325 until the higher brackets begin at $500,000.
The brackets are not adjusted for inflation, and that is one of the arguments against the measure listed in the Blue Book. As wages, pensions and withdrawals rise with prices, more income drifts into the higher brackets over time. At the top, $2 million of taxable income would owe $143,925 instead of $88,000, according to the same analysis.
Colorado Politics reported that a filer with $550,000 of income would pay $1,175 more, for a total of $25,375, and that a $2 million earner would pay $55,925 more. Those are the examples the campaign and the state analysis have used, and they show how little of the middle of the income scale the change touches.
Where the new money goes
The Blue Book puts the revenue gain at about $2 billion in the first full year, with $958.4 million for half of budget year 2026-27 and $1.972 billion for 2027-28. For ballot purposes it gives a maximum increase of $2.7 billion for 2027-28. The money is directed to K-12 education, health care, and early childhood care and education.
The additional revenue is exempt from the Taxpayer’s Bill of Rights limit, and the measure requires an audited annual report on how the money was raised and spent. The analysis also says Amendment 87 does not change current TABOR refunds, so the refund rules approved separately on the same ballot are not affected by the new brackets.
Chalkbeat Colorado reported that the AP call came on the morning of Nov. 6 and that the tax is expected to bring in about $2 billion of additional state revenue in 2028. The outlet also noted that lawmakers will have a significant role in deciding how the money is distributed, so the split among schools, health care and child care is not fixed by the ballot language alone.
Who argued for and against the brackets
State Sen. Julie Gonzales, a backer, said the measure would tax the rich their fair share to fund health care, child care and schools while providing a tax break to 97% of Coloradans. Rep. Lorena Garcia noted that child care can cost families $1,200 to $2,700 a month. Lisa Weil of Great Education Colorado called it probably the best opportunity she had seen to make the tax system more fair.
Gov. Jared Polis opposed the measure and has said it would raise taxes by over $2 billion. Attorney General Phil Weiser, a gubernatorial candidate, also opposed it. He said he supports a progressive income tax but that the state could lose hundreds of millions of dollars if Proposition 136 passed alongside it, and that he would implement Amendment 87 if voters approved it.
Kristi Burton Brown of Advance Colorado, which opposed the measure, said it hurts working families by sending their jobs out of the state. She also argued it would endanger state tax deductions for seniors on Social Security and for military veterans’ retirement income. Supporters answer that the large majority of taxpayers pay less or the same.
The court fight that came first
A challenge nearly kept the measure off the count. On Oct. 30 the Colorado Supreme Court rejected a late suit by Michael Hancock of Arapahoe County, who argued that 66 of 311 paid petition circulators were unregistered. In a 47-word order the seven justices let the Denver District Court’s dismissal stand and said an opinion would follow.
Final certified numbers will come from the Colorado Secretary of State after counties finish their canvass. Because the AP call came with Proposition 136 failing, the conflict the Blue Book warned about, where both measures pass and a court or the legislature must sort it out, does not arise.
For a household the practical effect is modest in the lower brackets and large only at the top. A retiree with $60,000 of Colorado taxable income would save $175 plus 0.2 points on $35,000, about $245 a year at 2027 rates, while the schools, health care and child care programs named in the measure receive the revenue from the other end of the scale.
Where does a Colorado retiree’s tax bill really get decided?
Amendment 87 moves a Colorado retiree’s state bill by at most $325 a year, and the larger swings in a retirement budget come from the federal tax return, Medicare costs and the house. A household that watches only the headline rate can miss the bigger leaks.
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This article was produced with AI assistance and edited for accuracy against the sources linked above.
