There are winners and losers in the GOP tax bill, and a lot of the coverage has focused on what it means for businesses and individuals, but state and local governments have a lot at stake too.
The Republican plan will add about $1.5 trillion to the federal deficit, yet it potentially will add money to Colorado’s coffers. State budget experts estimate roughly $300 million more in state taxes will be paid as a result.
How, you may ask?
Even though many taxpayers will see a rate cut, people’s taxable income, on average, is expected to increase because of changes with federal deductions. Specifically, line 43 of your federal form – “taxable income” – will be larger. That number carries over onto your Colorado return. Since the Centennial State’s income tax is a flat 4.63 percent of your federal taxable income, a bigger number means more dough coming in.
“And right now, we’re just trying to prepare ranges of potential impact,” said Henry Sobanet, the director of the state Office of Planning and Budgeting. “We wouldn’t want to spend this before it came in the door.”
Read the rest of the story at Colorado Public Radio.