Colorado Gov. Jared Polis, a wealthy tech entrepreneur worth hundreds of millions of dollars, paid little or no federal income taxes in the nine years before the Democrat was elected governor by taking advantage of loopholes that aren't available to most taxpayers, according to a ProPublica report published Thursday.
Polis paid nothing in federal income taxes from 2013 to 2015 and paid an effective rate of 8.2% from 2010 to 2018, substantially lower than the 19% paid by a taxpayer who made $45,000 in 2018, the report found.
A spokesman for Polis's reelection campaign told Colorado Politics in a statement that Polis has "always paid all taxes required by law" and hopes the ProPublica report — which also examined the tax burdens of other wealthy politicians — will encourage officials to "find additional bipartisan solutions that will create better, fairer systems."
The report is the latest revelation based on thousands of IRS records obtained this year by the nonprofit newsroom.
Polis is a former five-term congressman and self-made millionaire who started and sold numerous companies during the dot-com boom. He spent $23 million self-funding his campaign for governor but refused to release his recent tax returns during the 2018 campaign, saying he'd already released seven years worth of returns a decade earlier during his first congressional campaign and was waiting for his wealthy Republican opponent to release anything.
“After Walker Stapleton releases seven years (of his tax returns), I’m happy to talk about releasing more," Polis said.
Stapleton held firm, saying that the only people interested in seeing his tax returns were “political enemies trying to savage somebody for something.”
ProPublica said Polis, who launched his political career in 2000 with a successful run for the State Board of Education, used philanthropic deductions to keep his taxes "enviably low" for years, including charitable donations to causes that "served to promote him, blurring the lines between charity and campaigning."
Among his charitable spending, the report said, was more than $2 million spent from 2001 to 2008 on a mailer that went to "hundreds of thousands of households throughout Colorado" that built "on a foundation of familiarity with Jared Polis’ name and his support of public education."
A Polis spokeswoman told ProPublica the semiannual mailers were intended to highlight innovations and challenges in public education and pointed to other charitable spending by Polis.
“His philanthropy is not and has never been motivated by receiving a tax write-off, and to state otherwise is not only inaccurate but fabricating motives and intent and cynical in its view of charity,” said Virginia Graham.
This summer, Polis turned heads when he suggested the state might do away with its 4.55% income tax in order to encourage economic growth.
Asked what the state's ideal income tax rate should be by the moderator at a forum sponsored by the conservative Steamboat Institute, Polis responded, "It should be zero." He added: “We can find another way to generate the revenue that doesn’t discourage productivity and growth, and you absolutely can, and we should."
Other tax-avoidance strategies employed by Polis involved investing in businesses that don't produce much if any income while either growing in value that won't be taxed until they're sold or losing value, enabling write-offs to offset other income.
“When I make money, I pay taxes. When I don’t make money, I don’t," Polis said during his 2008 congressional campaign.
Polis also operates what's known as a "family office," a company that helps manage a wealthy individual or family's fortune while providing a deduction that can lower the tax burden.
"Ironically, the investment apparatus that helped Polis avoid taxable income became a tax break," ProPublica said.
Colorado Republican Party chairwoman blasted Polis in a release that slammed the Democrat's "hypocrisy."
"No wonder he has worked so hard to hide these facts from Colorado voters," said Kristi Burton Brown. "It’s shameful that he would use charity to promote himself and use every tax loophole in the book to avoid paying taxes, all while Colorado Democrats fight every day to raise taxes on Coloradans.”
A tax expert with Americans for Tax Fairness told ProPublica that Polis' wealth management arrangement amounts to a "giveaway."
“What is the public getting from it?" said Bob Lord. "This really, really rich politician gets to shelter his income while his investments grow and doesn’t pay tax on it until he sells.”
He noted that Polis could "dodge the tax system forever" by hanging on to his investments, while his heirs won't owe income taxes on their growth.