Coloradans will soon receive a welcome surprise in the mail — a check from their state government. The controller’s office announced enough income tax revenue was generated to issue every Colorado household a modest but meaningful $70 refund.

The idea of reducing the burden on taxpayers seems almost unheard of these days, especially as debate in Washington rages over the Biden administration’s tax-and-spend agenda. But in the Centennial State, policymakers know taxes don’t grow our economy, they slow it down.

Gov. Jared Polis understands this truth. Last month he proposed eliminating Colorado’s income tax. “In effect, when you tax something, you penalize it,” he said. While the governor’s proposal might be a tough sell, let’s not forget that just last year Colorado voters approved a proposition to reduce the state income tax from 4.63 percent to 4.55 percent, and residents are working to introduce a similar ballot measure this year to further reduce the rate.

This kind of forward-thinking tax policy flies in the face of negotiations in Washington, where President Biden and some members of Congress have proposed raising the U.S. corporate tax rate. 

While increasing rates on “big companies” might make for a compelling sound bite, it doesn’t make for good policy — especially as businesses and workers struggle to recover from the COVID-19 pandemic and face renewed threats from the Delta variant. As Gov. Polis noted, raising rates will penalize our job creators and laborers, which will result in fewer jobs, lower wages and less productivity.

Research demonstrates corporate taxes overwhelmingly get passed on to workers. According to a Congressional Budget Office analyst noted, workers shoulder more than 70 percent of the long-run burden of a corporate tax. This occurs through wage reductions, fewer job opportunities and less investment in training and equipment.

The White House promised a corporate tax increase would affect neither most middle-class families nor 97 percent of small businesses. Yet, an analysis by the non-partisan Joint Committee on Taxation found that fully 98 percent of Americans who earn less than $500,000 would be affected, including 1.4 million small and family-owned businesses set up a C corporation.

Raymond Keating, chief economist of the Small Business and Entrepreneurship Council, cautioned against raising rates as businesses continue to struggle to turn the page on COVID-19. 

“Tax increases are always negative, but tax increases when you are trying to recover from a pandemic are really ill-advised,” Keating wrote.

There are ways to ensure major corporations — which employ tax avoidance measures when rates are too high — pay their fair share. That requires keeping rates low, closing loopholes and simplifying the tax code, which would also generate significant revenue. Unilaterally raising tax rates won’t solve the problem. It will make it worse, and put honest, hard-working businesses further behind their larger counterparts.

Nearly four years ago, Congress voted to reduce the U.S. corporate tax rate, which was then the highest in the industrialized world. That realignment put U.S. companies on more equal footing with competitors around the globe and unlocked significant growth throughout Colorado and the United States.

During 2018 and 2019, national wages grew by 4.9 percent, the fastest two-year growth rate in two decades. In 2019, unemployment hit a 50-year low and median household income rose 6.8 percent year-over-year. Weekly wages in Colorado achieved the highest annual growth in the country in the third quarter of 2019 — by a “landslide,” as the Denver Business Journal reported it.

These gains demonstrate what Colorado policymakers know. A competitive tax code benefits our job creators, our workers, our communities and our economy. This shouldn’t be a party line issue. The bipartisan infrastructure package passed by the U.S. Senate last month showed Congress can invest in our country without raising taxes on businesses and workers.

Here in Colorado, Democrats and Republicans are working together to advance tax policy that will grow our economy, create jobs and expand our middle class. I urge leaders in Washington to do the same and oppose any legislation that would raise the U.S. corporate tax rate.  

State Rep. Matt Soper, a Republican from Delta, represents parts of Mesa and Delta counties in the Colorado Legislature.