Colorado’s department of revenue services implemented an individual income tax rate of 4.63%. This 4.63% flat rate ranks as the 38th highest in the nation. The 4.63% flat rate is also applied to corporate income tax (Drenkard, Table 11). For the states that have implemented a state sales/use tax, Colorado has the lowest rate in the country with 2.90% (Colorado Department of Revenue). Yet, the average local sales tax is 4.54%, totaling an average combined sales tax of 7.44%; which ranks 15th in highest sales tax in the country. Colorado, along with thirteen other states, collects no state level property taxes. According to Tax Foundation, a non-profit educational and research organization, Colorado is 41st in state tax collections per captia with $1,714. That is well below the national average of $2,287(Drenkard, Table 5). The individual flat rate income tax of 4.63% caused the state to have the 19th most individual income tax collected per capita with $816. That is slightly higher than the US national average of $767(Drenkard, Table 12). When comparing the two figures, individual tax collections are higher nationally while total tax collections were less than national average. This indirect correlation in income tax collected per capita and state tax collections per capita may indicate that Colorado has placed more tax burden on the individual over other taxable categories.
The tax burden Colorado places on individuals and businesses are neither the highest nor lowest in the nation. The lack of a state level property tax places slightly less overall tax burden on individuals and businesses. Yet, Colorado’s financial issues may present the biggest concern for individuals and businesses. The University of Denver issued a report stating Colorado’s fiscal 2012 budget included making a massive 230 million dollar cut in K-12 education, an 81 million dollar cut into higher education and closing a state prison (Griesemer, pg. 6). The report later indicates that many of Colorado’s financial difficulties can be attributed to the housing and financial collapse of 2008. The report claims that