Colorado voters will decide this November whether to overhaul the state's income tax system, raising rates for the highest earners while cutting taxes for most residents. See the full story in the video below State income tax ov erhaul targeting top 3% of earners heads to November ballotInitiative 195 would eliminate Colorado's 4.4% flat income tax rate and replace it with a graduated income tax system starting Jan. 1, 2027. Individuals and businesses earning more than $500,000 a year would pay higher taxes, while about 97% of Coloradans would see a tax reduction.Under the proposal, an individual making $50,000 to $100,000 would see their state income taxes drop by about $210 on average. Those earning between $100,000 and $200,000 would see an average decrease of $298 on their taxes. The proposed tax rates would range from 3.7% on income up to $25,000 to more than 8% on income more than $10,000,000 per year.Initiative 195 would increase taxes on businesses with net profits exceeding $500,000 a year, a threshold supporters say affects 5% of corporate taxpayers in the state.According to a fiscal summary from the nonpartisan Legislative Council Staff, the measure is estimated to increase state revenue by about $2 billion annually by fiscal year 2027-28, with a maximum projected increase of $2.7 billion.Supporters say the revenue collected would go toward funding K-12 education, healthcare, and childcare. Lisa Weil, executive director of Great Education Colorado, said the state's current income tax system is fundamentally unfair."It's wrong that a teacher pays the same tax rate as a billionaire," Weil said. "It's the right thing to do. Our tax system is broken, and we've got to fix it." Weil said the revenue brought in from the measure would be used for things like raising teacher pay, increasing per pupil funding in K-12 schools, and funding Medicaid programs hit by cuts by the federal government.Opponents, including Advance Colorado President Michael Fields, argue the tax changes could drive businesses and high-income earners out of Colorado."They want to say, 'Hey, wealthier people will pay more.' Well, the consequence could be that people leave the state, that businesses end up leaving and are like, look, we can go to Florida or Wyoming where there's zero income tax," Fields said. "If some of the biggest corporations and individuals that pay taxes leave the state, you end up with less revenue, not more." Advance Colorado backed a competing ballot measure, Initiative 232, which will also appear on Novembers ballot. If approved, it would cap the state income tax rate at 4.4%. Under state law, if both Initiatives 195 and 232 pass, the measure receiving the most yes votes will take effect.Jon Caldara, President of Independence Institute, has also voiced opposition to the proposed graduated income tax system. In a press release, the organization raised concerns that the $2 billion in annual revenue would be exempt from state's revenue cap outlined in the Taxpayer's Bill of Rights (TABOR).Radical groups are proposing the largest income tax increase in state history, and the only result they're promising is divisive class warfare, said Caldara in the press release. They name causes like education and healthcare, but not one dime is guaranteed to any specific recipient. They dont care where it goes, they just care where it comes from.Shad Murib, Chair of the Colorado Democratic Party, sent Denver7 the following statement in support of Initiative 195: Initiative 195 is simple: 97% of Coloradans get a tax cut while the very top pay their fair share to support our schools, health care and child care. The Colorado Democratic Party fully supports this effort, and we look forward to helping pass it in November." ...read more read less