Colorado Plans Graduated Tax Proposal for 2026 Ballot

The One Big Beautiful Bill Act of 2025, signed into law by President Trump, introduces significant changes to U.S. tax policy, including increases in standard deductions, adjustments to tax brackets, and enhancements to the Child Tax Credit, which is now indexed for inflation for the first time. Bloomberg Tax & Accounting projects that these adjustments will affect both individual and corporate taxpayers in 2026, with steeper changes in lower tax brackets and modified alternative minimum tax phaseouts. In Colorado, a coalition named Protect Colorado's Future is pushing a ballot measure for 2026 to replace the state's flat income tax with a graduated tax system that would increase rates for individuals and corporations earning over $500,000; this aims to address a $1.2 billion budget shortfall caused partly by cuts under the federal bill and to fund education, healthcare, and childcare. Supporters argue the change will make the tax code fairer by ensuring the wealthy pay a larger share, while opponents warn it could harm Colorado’s affordability and economic competitiveness. Recent legislative efforts have already begun to close the budget gap, but advocates maintain that only voter approval of the graduated tax can restore funding to critical state priorities. These developments underscore ongoing national and state-level debates about tax fairness and economic policy under the current administration.