Colorado built one of the Mountain West’s great economies by attracting entrepreneurs, investment, and talented workers. Now there are increasingly visible signs that the state is surrendering that advantage, just as voters may be asked in November to choose between two ballot initiatives that would send Colorado’s business climate in sharply different directions.
Palantir provided the most dramatic warning. The technology company moved its headquarters from California to Denver in 2020, only to announce this year that it was leaving Colorado for Florida. Its departure became a symbol of a broader concern among Colorado business leaders about the state’s competitiveness.
In April, more than 200 technology, business, and civic leaders signed an open letter warning that Colorado had reached an “inflection point” and that “the foundation of Colorado’s technology and business leadership is deteriorating.” They said founders and investors increasingly viewed Colorado as a less predictable and less competitive place to build businesses and urged state leaders to examine the regulatory, legislative, and political factors causing companies and investment to migrate elsewhere.
The Colorado Chamber Foundation has found reason for similar concern. Its relocation tracker identified dozens of companies that relocated, reduced operations, or chose to make major investments outside Colorado between 2019 and 2025. Texas alone attracted 21 of the companies identified in the report, while Arizona and North Carolina lured away another dozen. The chamber cautions that its tracker is not comprehensive, but rather a compilation of publicly announced moves and investment decisions.
Against that backdrop, Colorado voters are being asked to choose between two sharply conflicting tax proposals this November: initiatives 195 and 232.
Initiative 195 would eliminate Colorado’s highly competitive flat tax and replace it with a progressive tax structure with graduated rates reaching 8.4%. Tax hike proponents say the policy would raise revenue by $2.8 billion.
Initiative 195 would also boost spending by functionally repealing the state’s Taxpayer Bill of Rights, which has limited annual spending growth to the rate of population growth plus inflation. If 195 passes, all education spending would be exempt from the cap, allowing legislators to spend an additional $4.5 billion a year.
Yet Initiative 195’s premise that Colorado needs substantially more room to spend is hard to square with the state’s recent fiscal history. State operating appropriations have climbed nearly 77% over the past decade. Even after adjusting for inflation and population growth, spending per resident is up about 17%.
Initiative 232 takes the opposite approach. It would cap Colorado’s individual and corporate income tax rates at the existing 4.4%, preventing the higher rates contemplated by 195. Colorado adopted its flat income tax in 1987, and that simple, relatively low tax structure has been a cornerstone of the state’s emergence as one of the Mountain West’s fastest-growing economies. Voters subsequently approved rate reductions in both 2020 and 2022, leading to higher investment and job creation.
DEMOCRATS TRY TO DODGE ‘WOKE 1’
In July, Colorado Democratic primary voters lurched far to the left, booting 15-term Rep. Diana DeGette (D-CO) in favor of Democratic Socialists of America-endorsed Melat Kiros, who has said not only that she was “excited” to see Palantir leave the state but also that she wanted Lockheed Martin and Suncor to leave.
That attitude captures the choice now confronting Colorado. The state can respond to mounting warnings about its competitiveness by making it more expensive and less predictable to invest there, or it can preserve the low, flat tax structure that helped make Colorado an economic leader in the Mountain West. Which way, Colorado?