Colorado Voters to Decide on Tax Amendment 87
The November 3, 2026, ballot initiative would replace the state's flat tax with a new graduated income tax system.
Updated on Oct. 24, 2026 in Taxes
Live Poll
Will increasing taxes on high earners benefit public services more than it risks economic flight?
Colorado voters will decide on November 3, 2026, whether to replace the state's 4.4% flat income tax with a graduated system featuring six brackets. If approved, the measure would change tax rates for individuals and businesses earning above or below $500,000 starting in 2027.
Why it matters
Proponents of Amendment 87 estimate the change will generate $2 billion annually for education, childcare, and healthcare to address recent $1 billion budget shortfalls. Opponents contend that the higher rates could drive businesses out of the state and lead to increased costs for consumers.
Amendment 87 establishes six new tax brackets ranging from 3.7% to 8.4% for both individuals and businesses. The policy impacts approximately 100,000 taxpayers currently earning more than $500,000 annually.
The players
Colorado Voters
The electorate of Colorado holds the authority to approve or reject state constitutional amendments through the ballot process.
The details
The proposed tax structure adjusts brackets based on federal taxable income as defined under Section 63 of the Internal Revenue Code. While earners above the $500,000 threshold face increases, those earning below that amount are slated for tax decreases.
Timeline
Massachusetts increased its income tax on earnings over $1 million in 2022.
Colorado voters will vote on Amendment 87 on November 3, 2026.
The new tax brackets would apply for tax years beginning on or after January 1, 2027.
Market Dynamics
This initiative follows the pattern set by the Massachusetts Fair Share Amendment, which implemented a higher tax rate on high-income earners to fund public services. Policymakers are increasingly evaluating graduated income taxes as a mechanism to stabilize state budgets during periods of fiscal volatility.
Taxpayers earning over $500,000 should prepare for potential increases in their state tax liability starting in the 2027 tax year. Conversely, residents and business owners earning below that threshold may see their tax burden decrease under the new graduated system.
The takeaway
Voters face a choice between maintaining a flat tax rate or adopting a progressive structure aimed at closing state budget gaps. Residents should assess their projected annual income relative to the $500,000 threshold to understand how the potential passage of the amendment may impact their financial planning.
What happens next
Colorado voters will cast their ballots on the measure during the general election held on November 3, 2026.
Further reading
Learn more about the implications of Colorado Taxes on the state economy.
Live Poll
Will increasing taxes on high earners benefit public services more than it risks economic flight?
