Colorado voters have the option to boost funding on K-12 education, healthcare and early childhood programs. The catch? Higher earners would pay more in income taxes.

Amendment 87 would change how Colorado collects individual and corporate income taxes, replacing the state’s current 4.4% flat rate with a graduated system beginning in 2027. People and businesses earning more than $500,000 would face higher tax rates, while many lower-income taxpayers would pay less. 

Under Amendment 87, the first $25,000 of income would be taxed at 3.7%, down from 4.4%. Rates would climb in six steps, reaching 7.4% on income between $500,001 and $750,000 and 8.4% on income above $1 million, according to the state’s ballot information booklet.

Amendment 87 is projected to generate about $2 billion in the fiscal year 2027–28. The revenue generated from this initiative will be used on K-12 education, healthcare and early childhood programs.

But opponents argue passing a graduated tax would make Colorado less economically competitive, hurt small businesses and ultimately drive businesses and wealthy people away. According to the Colorado Blue Book, they also note the brackets would not be adjusted for inflation, so more income would land in higher brackets over time.

Talia Rotella, campaigns associate at the Colorado Fiscal Institute, a nonprofit research and advocacy organization, said that most corporations earning more than $500,000 in Colorado are multistate companies, not small or local businesses. 

“These are Targets and Walmarts,” she said.

Rotella grew up in Colorado and was a part of the public school system over a decade ago. 

“I grew up in the system during, kind of, the most financially challenging times in the past few decades in Colorado and we definitely felt it in K-12,” Rotella said. “I am really excited to see how this investment can benefit the next generation.”

But Amendment 87 is not the only income tax measure on Colorado’s Nov. 3 ballot. Proposition 136, backed by the conservative group Advance Colorado, would write the current 4.4% rate into state law as the maximum rate; it wouldn’t change what Coloradans pay today. 

The competing proposals leave voters weighing two different options: whether to allow higher rates on top earners and businesses to generate additional funding for public services or to establish a statutory limit on the state income tax rate.

Samuel Maguire, a CU student and Texas native, said he can see both sides of the issue. 

“Coming from Texas where there is no income tax, it really incentivizes harder work and more earning,” Maguire said. “The money the state spends has to come from somewhere.” 

Renny Fagan, current owner of Nostos Consulting LLC and a former Democratic state representative, said Amendment 87 is not Colorado’s first attempt at a graduated income tax system. 

“At the end of my last year in the House, 1992, I introduced a graduated tax bill to reestablish the graduated income tax,” Fagan said. “In the fall of 1992, voters passed TABOR, and TABOR requires a single rate for all income tax.” 

Paige Linville, a CU business student and Colorado resident, said she is worried that “the rich people of Boulder will no longer want to live in Colorado because of this tax.”

But Fagan pointed to Massachusetts, which adopted a different kind of high-earner tax. 

“Massachusetts raised taxes on millionaires and they have more millionaires than they did before the tax was passed,” he said.

A 2025 report from the Institute for Policy Studies and the State Revenue Alliance found the number of Massachusetts residents with a net worth of at least $1 million rose 38.6% between 2022 and 2024, from 441,610 to 612,109. The report also said the surtax raised nearly $2.2 billion in fiscal 2024, far more than projected.

Its author, Omar Ocampo, a researcher for the Program on Inequality and the Common Good, argues that high earners tend to move less often than most people.

However, the increase in millionaires does not prove that the surtax kept wealthy residents from leaving; net worth counts assets, such as homes and savings. The report also does not track who moved in or out of the state.

And while business owners, tax policy wonks and many workers in Colorado are debating the merits of the amendment — and the proposition to keep the rate at 4.4% — there are others like Denver native Elliot Busam who doesn’t know much about the proposed amendment. 

“I haven’t heard much on this issue in all honesty,” Busam said. “It should be talked about much more.”