The Perpetual Tax Hike Hidden in Colorado’s Amendment 87

“Youth is wasted on all the wrong people.”

That’s one of my favorite lines from “It’s a Wonderful Life.” The older I get, the less it sounds like a joke.

Every generation inherits victories it did not win. Young Americans never experienced the Cold War, the draft or stagflation. Double-digit inflation is something grandpa now mentions in one of his rambling monologues about how good we have it.

The young don’t remember bracket creep because why would they? They never, ever experienced it. A previous generation defeated it for them.

The yearly tax hikeThough it sounds like a medical condition, bracket creep was one of government’s most sinister ways of raising taxes without voting to raise taxes.

Inflation pushed wages upward — even when purchasing power went down. Because federal tax brackets remained fixed, workers were steadily pushed into higher tax rates without actually becoming any richer.

Your paycheck got bigger but so did your grocery, utility, insurance and every other bill. Your standard of living stayed put at best. Washington congratulated you on becoming “richer” and sent a larger tax bill.

It was a yearly tax increase. Was.

In the early 1980s, Colorado U.S. Sen. Bill Armstrong, then on the Senate Finance Committee, led the fight to end it. Federal income tax brackets became indexed to inflation.

Now when your income rises with the cost of living, you’re not pushed into a higher tax bracket.

Government no longer profits by confusing more dollars with more wealth.

Colorado attacked it another way. In 1987, Democratic Gov. Roy Romer signed legislation replacing the state’s graduated income tax with a flat rate and put the state into economic overdrive.