Tax Hikes And Tax Limits On The November Ballot In Colorado And Texas

TITLE: Colorado’s Progressive Tax Expansion Meets Texas’ Conservative Fiscal Guardrails In November Showdown

State Ballots Reflect Widening Fiscal Policy Divide

While national political attention remains fixed on congressional redistricting battles, voters in Colorado and Texas will decide consequential tax policy measures this November that highlight the growing fiscal policy divergence between progressive and conservative states. These ballot initiatives represent fundamentally different approaches to taxation, government spending, and economic philosophy that could signal broader national trends in state-level fiscal policy.

State Ballots Reflect Widening Fiscal Policy Divide
Colorado’s Dual Tax Increase Propositions
The Mechanics of Colorado’s Tax Increases
The Bracket Creep Concern
Texas Moves in Opposite Direction
Broader Implications for State Fiscal Policy

Colorado’s Dual Tax Increase Propositions

Colorado voters face two significant tax measures referred by the state’s Democratic-controlled legislature. Proposition MM seeks to expand a previously enacted tax increase by further limiting itemized deductions for high-income households, while Proposition LL aims to exempt school lunch program funding from the state’s Taxpayer’s Bill of Rights (TABOR) constraints., as comprehensive coverage, according to recent developments

The measures build upon Proposition FF, which voters approved in 2022 to fund universal school lunches by limiting deductions for households earning over $300,000. Proposition FF reduced deduction caps from $60,000 to $16,000 for joint filers and from $30,000 to $12,000 for single filers at that income level., according to industry news

The Mechanics of Colorado’s Tax Increases

Proposition MM would implement even stricter deduction limits, reducing caps to $2,000 for joint filers and $1,000 for single filers. This additional tax hike is projected to generate $95 million annually beyond what Proposition FF already collects. Meanwhile, Proposition LL addresses the fact that Proposition FF revenue has exceeded initial projections by more than 11%, collecting $112 million instead of the estimated $100.7 million., according to technology trends

“Proposition LL not only allows the state to retain the $12.4 million in over-collected revenue from the last fiscal year but permanently ‘deTABORs’ Proposition FF revenue moving forward,” explains analysis from the Independence Institute. The measure would prevent automatic taxpayer refunds when collections exceed estimates and lock in higher spending levels.

The Bracket Creep Concern

Critics highlight that the $300,000 income threshold for deduction limits isn’t indexed for inflation, creating what policy analysts call “bracket creep.” As Herman and Fogleman note, “Those earning $300,000 in 2025 have the same buying power as those making $274,253 in 2022 due to inflation, meaning its tax base is already broader in real terms.”

This design means that over time, more middle-class Colorado households will become subject to the deduction limits originally marketed as targeting only the wealthy. Assuming historical inflation and income growth patterns, households earning $300,000 in ten years would have purchasing power equivalent to approximately $190,000 in today’s dollars.

Texas Moves in Opposite Direction

While Colorado considers expanding tax increases, Texas voters will decide on multiple measures to strengthen existing taxpayer protections and prohibit new forms of taxation. The Republican-led legislature has referred 17 propositions to the November ballot, with several specifically designed to lock in conservative fiscal policies., according to recent studies

Proposition 2 would constitutionally prohibit capital gains taxes, building on the state’s existing constitutional ban on income taxes. Governor Greg Abbott expressed confidence that voters will approve the measure to “ensure that we’re not going to have a capital gains tax in Texas.”

Proposition 6 would amend the state constitution to prohibit financial transaction taxes, preventing what some progressive groups have advocated at both state and federal levels. Meanwhile, Proposition 8 would constitutionally ban estate taxes and inheritance taxes, closing potential loopholes in the state’s anti-tax framework.

Broader Implications for State Fiscal Policy

The contrasting approaches in Colorado and Texas represent a national laboratory for competing economic philosophies. Colorado’s measures seek to permanently fund expanded government benefits through progressive taxation, while Texas’s propositions aim to constitutionally prohibit entire categories of taxation that other states utilize.

These votes come as many states grapple with post-pandemic budget realities and ideological divisions over the proper role and size of government. The outcomes could influence similar efforts in other states, particularly as policymakers watch how voters respond to these clearly defined fiscal choices.

As Jon Caldara of the Independence Institute questions regarding Colorado’s approach, “Why are we taxing wealthy people to buy free lunches for the kids of just slightly less wealthy people? Of course, children of poorer family should get a free lunch. But buying lunch for those who can afford it isn’t charity. It’s theft.”

The November results will provide valuable insight into voter appetite for both tax limitation and tax expansion as states continue to chart divergent fiscal courses in an increasingly polarized political environment.