As we head toward November's election, politicians are trying to keep everyone happy with more than $75 million in state tax credits, exemptions and grants. Democrats and Republicans want to reward transactions and causes they cherish while discouraging those they consider harmful. A Gazette analysis found the giveaways are split almost evenly between Republican and Democratic interests.
Even buyers of wine and cigarettes can be rewarded under the state's tax code.
"No tax is imposed on the sale of sacramental wines used for religious purposes," says 12-47-106(1), a tax break provision in Colorado statutes since 1935. It's a tax tradition that respects liberation of religion from the state.
The state Legislature exempts liquor excise taxes for any adult who arrives in Colorado with limited amounts of alcohol, for personal consumption, from another country.
A provision on the books since 2004 gives tax credits to anyone who sells cigarettes on credit and doesn't get paid.
Environmentalists enjoy a "plastic recycling investment credit," which reduces tax overhead on rent, wages, supplies and an assortment of equipment associated with plastics recycling. Investments in alternative fuels get tax credits, while advocates of a tax break for investments in alternative, private education continue to fail in their quest to ease the cost of tuition.
Republican-friendly tax credits include incentives for business endeavors they hope create jobs and tax revenues. A tax credit that helps with day care expenses for some of Colorado's lowest income families gets bipartisan support, as it helps people work.
Some tax breaks should be scrutinized by both parties as potentially harmful. State government taxes snacks, such as chewing gum, soda and candy. Junk food is taxed, we're told, because it's bad for kids. It rots teeth and can lead to obesity and diabetes.
Yet, the state's array of special tax exemptions includes one for soda and candy for buyers who are poor. That's right, the Legislature exempts from state taxes all junk food bought with food stamps or government vouchers. If we're going to use tax laws to encourage nutrition, we should extend the ostensible benefit to rich and poor alike. Disadvantaged children deserve the same state protections from junk food that are extended to their wealthier peers.
The latest state report on various tax breaks was issued in 2012 and consists of 117 pages, which are mostly filled with lists and blurbs that tell of special-interest tax exemptions.
"We like to think we have a flat tax in Colorado, with everyone paying the same rates," said Amy Oliver Cook, executive vice president and director of the Energy Policy Center at Colorado's Independence Institute. "A report that details all of these special-interest tax breaks confirms that we do not have a flat tax."
Most tax exemptions, if not all, result after relentless efforts by professional lobbyists who are paid to achieve tax breaks for special interests. Some help legitimately good causes. Some help the private sector achieve employment. For those who don't like a tax structure of winners and losers chosen by politicians, there's lots of blame to go around. This game is played by the left, the right and everyone in between.
A bill proposed this session by Pat Steadman, D-Denver, and Rep. Millie Hamner, D-Dillon, would cause the state to issue a new report on special-interest tax breaks every two years. The bill favors transparency, and it's a good idea.
Rep. Mark Waller, R-Colorado Springs, explains that it's important to frequently revisit tax breaks to establish a "truing" of the system.
Though we may never achieve a genuine flat tax, and therefore an organic market devoid of penalties and incentives, Colorado politicians and their constituents can and should scrutinize tax incentives to ensure they favor the public good - not just the interests of a chosen few with money to lobby.