Election 2020: Arizona voters raised taxes on some, Illinois rejected measure, and Colorado gave everyone a tax cut

Janna Herron
·Editor
·2 min read

Arizona voters passed a new tax on higher earners on Tuesday, while Illinois residents voted against moving to a tiered tax structure. In Colorado, voters opted for a tax cut for everyone.

The disparate outcomes on state income taxes aren’t uncommon, one expert said, because an initiative’s likely success depends not on partisanship but often where the tax money goes.

Read more: How to reduce your taxable income

“The results are interesting but not surprising and are consistent with how voters across the country respond to income tax measures,” Jared Walczak, vice president of state projects at the Tax Foundation, a Washington, D.C.-based think tank, told Yahoo Money. “Voters usually favor a lower income tax option when presented with a measure.”

That’s the case in Colorado, where Proposition 116 passed. The measure decreases the state income tax rate from 4.63% to 4.55% for individuals, estates, trusts, and foreign and domestic C-corporations operating in the state.

GOLDEN, CO - NOVEMBER 03: First time voter Daylon Stutz, 23, votes at the Jefferson County Fairgrounds on November 3, 2020 in Golden, Colorado. After a record-breaking early voting turnout, Americans head to the polls on the last day to cast their vote for incumbent U.S. President Donald Trump or Democratic nominee Joe Biden in the 2020 presidential election. (Photo by Marc Piscotty/Getty Images)
First time voter Daylon Stutz, 23, votes at the Jefferson County Fairgrounds on November 3, 2020 in Golden, Colorado. (Photo by Marc Piscotty/Getty Images)

“But where we see that diverge is when higher taxes are tied to spending they support,” Walczak said.

For instance, in Arizona, a new 3.5% tax on individuals making more than $250,000 ($500,000 for joint filers) looks likely to pass, with 98% of precincts reporting and 52.55% of voters in favor and 47.45% against the initiative, according to Ballotpedia.org.

Read more: How to defer or reduce taxes

That’s on top of the existing income tax of 4.5% these earners already pay. But the revenue would fund teacher and classroom support staff salaries, teacher mentoring and retention programs, career and technical education programs, and the Arizona Teachers Academy.

Voters “embraced” the measure because it was tied to a popular cause — higher salaries for teachers and education programs, Walczak said. Transportation is another issue voters get behind, he said.

A man casts his ballot at the United Center on Election Day in Chicago, Illinois, on November 3, 2020. - Americans were voting on Tuesday under the shadow of a surging coronavirus pandemic to decide whether to reelect Republican Donald Trump, one of the most polarizing presidents in US history, or send Democrat Joe Biden to the White House. (Photo by KAMIL KRZACZYNSKI / AFP) (Photo by KAMIL KRZACZYNSKI/AFP via Getty Images)
A man casts his ballot at the United Center on Election Day in Chicago, Illinois, on November 3, 2020. (Photo by KAMIL KRZACZYNSKI/AFP via Getty Images)

In Illinois, voters rejected an amendment allowing a graduated income tax structure. The state now has a flat tax on personal income, which assesses one tax rate for all taxpayers, regardless of income. The amendment would have repealed the flat tax and allowed the state to enact a graduated income tax, which assesses higher tax rates on higher levels of income.

One reason the tax didn’t pass, according to Walczak, is because the revenue generated from it would go to general purposes.

“Voters don’t think rates should be higher on most people, economically,” he said, “when they don’t know where it goes to or if it’s just to increase revenue.”

Janna is an editor for Yahoo Money and Cashay. Follow her on Twitter @JannaHerron.

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