Colorado Voters Will Decide on Tax Cap Proposal

Residents will vote this November on Proposition 136, which seeks to set a 4.4% limit on state income tax rates.

Updated on Oct. 7, 2026 in Taxes

Bold flat-color editorial illustration of a geometric mountain peak, symbolizing the structural policy nature of the Colorado tax cap proposal. — Colorado voters will decide the future of the state's flat tax structure this November by voting on Proposition 136. AI Illustration. Upload story photo >

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Do you support capping state income tax rates at a flat percentage for all earners?

Colorado voters will head to the polls this November to decide on Proposition 136, a ballot initiative that proposes a 4.4% cap on both individual and corporate income taxes. The measure serves as a direct response to competing proposals that seek to adjust the state's existing flat tax structure.

Why it matters

The outcome of the vote will determine the future of Colorado's flat income tax system and define the state's ability to adjust tax policy. This initiative acts as a challenge to competing measures like Amendment 87, which aims to increase taxes for earners above a $500,000 threshold.

Colorado currently maintains a flat 4.4% income tax rate, while 23 other states currently utilize a graduated income tax system. During the 2023-2024 fiscal year, the state returned $1.7 billion in excess revenue to taxpayers.

The players

Taxpayer Bill of Rights

This constitutional provision limits state revenue growth and requires voter approval for any tax rate increases.

The details

Proposition 136 is positioned as a countermeasure to Amendment 87 and ballot initiative 195, which propose creating a graduated tax system. Under current law established by the 1992 Taxpayer Bill of Rights, lawmakers are prohibited from raising tax rates without receiving explicit voter approval.

1992 marked the passage of the Taxpayer Bill of Rights.
During the 2023-2024 fiscal year, the state refunded $1.7 billion in excess revenue.
Voters will decide on Proposition 136 in November 2026.

Market Dynamics

This proposal reflects a long-standing tension in Colorado between maintaining a flat tax structure and pressures to adopt graduated systems seen in 23 other states. It aligns with the state's history of prioritizing revenue limits established by the Taxpayer Bill of Rights.

The passage of Proposition 136 would constitutionally lock the state income tax at its current 4.4% rate, preventing future increases without a public vote. For a median income family in La Plata County, this would maintain the current tax liability structure tied to the existing flat rate.

The takeaway

Colorado voters will decide if current tax thresholds should be permanently capped at the existing 4.4% rate. Understanding the difference between flat and graduated tax systems is essential for residents as they evaluate how these ballot measures impact their long-term financial planning.