Could Colorado become the 10th state in the nation to go without income tax? Gov. Jared Polis says if income taxes are lowered in accordance with a raising of taxes on carbon and pollution-producing industries, it can, and it should.

Visiting the Steamboat Institute’s Freedom Conference and Festival at Beaver Creek on Friday, Polis was asked a simple question by moderator Hadley Heath Manning: What do you think the state income tax should be?

“It should be zero,” Polis said. “We can find another way to generate the revenue that doesn’t discourage productivity and growth. And you absolutely can, and we should.”

Polis, a Democrat who represented Vail and parts of Eagle County in the U.S. House of Representatives before becoming governor, received a round of applause for the statement from audience members who would be seeing mostly conservative speakers at the event. The Freedom Conference headliner was Mike Pompeo, former director of the CIA and Secretary of State under former President Donald Trump, and Carol M. Swain, the vice chair of Trump’s Advisory 1776 Commission, also spoke.

Laffer score

Steamboat Institute CEO and co-founder Jennifer Schubert-Akin described the event as a celebration of freedom and American exceptionalism in a beautiful mountain setting.

In her letter to attendees, Schubert-Akin said, “Over the next two days, we will discuss why the U.S. Constitution and rule of law have been central to America’s surviving and thriving for 245 years. We will have robust discussion of the truth of America’s founding and will expose the dangers of theories, which would pit us against one another based on the color of our skin. We will hear from Colorado’s governor and one of the great free market economists of our time on how states can unleash prosperity with policies that encourage entrepreneurism and creativity. And we will recognize the courage and leadership of brave young men and women who stand strong for individual liberty and free enterprise, even in the current atmosphere of cancel culture, media bias and free speech suppression on college campuses.”

Polis received praise from Manning for attending the event and joining on a panel with Dr. Art Laffer, a former Reagan administration official and conservative whom Polis has known for decades.

Laffer is part of a group which compiles a leaderboard of U.S. governors, grading the state leaders based on policy performance, results and executive leadership before and after the start of the pandemic. Laffer said Polis was “the highest ranked Democratic governor in the United States,” according to his ranking.

Polis and Laffer were in agreement on the premise that eliminating the state income tax would make Polis “rank No. 1 and beat Utah all to heck” on Laffer’s ranking, Laffer said.

Income tax, air quality down

When Polis was elected in 2018, Colorado’s income tax was 4.63%. Next year, it will go down to 4.5%, something Polis described as a small victory.

“We celebrate every step of progress along the way,” he said. “It’s not zero or nothing.”

Polis said his administration would be “very interested in finding out, in a revenue neutral way, how to go from taxing income to taxing something we don’t like, and I usually put the word pollution or carbon emissions in there,” describing it as something that would be “a very pro-growth policy.”

Polis referenced poor air quality in Colorado from reasons more localized than the wildfire smoke that’s being experienced across the West.

The Front Range is currently experiencing the worst ozone pollution the state has seen since record keeping on ozone air quality began in 2011. Since May 31, the state has issued 64 ozone action day alerts for the Front Range.

Polis said the idea is “easier said than done, but in effect, when you tax something, you penalize it. And there’s things you actually want to penalize in society, like pollution might be one of them. … If you want to move away from taxing something that you don’t want to discourage, because we want everybody to make income, we want companies to make income, that’s a great thing, to basing it on taxing pollution or carbon or something that we fundamentally don’t want, we’ll have a more pro-growth tax structure that gets the right incentives in place to help grow what you want to grow and penalize things that are negative externalities.”