As the Colorado legislature cries poverty, remember the three taxes | CALDARA | Opinion

There are three ways you get taxed.

The first way seems transparent — direct taxation and fees. Money’s taken out of your paycheck, you see that. You write a check for property taxes, pay sales tax on a cup of coffee.

These “transparent” taxes can still be opaque. Renters don’t realize they’re paying property tax in their rent check. Instead, they just hate their evil landlord. King Soopers’ property taxes and employer taxes are baked into every loaf of bread you buy.

Colorado’s good at hiding taxes and fees. Like when you are laid up in the hospital, you’re charged a bed tax. By law that “fee” cannot appear on your hospital bill. Thus, you get angry at the hospital, not your benevolent politicians.

The second form of taxation is inflation, caused by the feds uncontrollably printing money. We’ve been conditioned to think inflation is natural and unavoidable, and government works to keep it in check. The truth is just the opposite.

Deflation is the norm when money supply growth is attached to something that can’t be easily increased. When the United States was on the gold standard, the buying power of cash would increase, not shrink.

Warning: boring but important illustration with numbers ahead.

If you saved a $20 paper note from 1925 it would be worth $20 today, duh. And due to inflation, it could only buy a tiny fraction of what it did 100 years ago. But a 1925 $20 gold coin (1 ounce) is worth more than $3,300 today, because dollar bills are printed willy-nilly without limit. But you can’t print gold. It’s limited.

Imagine if we never went off the gold standard (a process then-President Franklin Delano Roosevelt started in 1933, and Nixon finished in 1971). The cost of an average new home in 1925 was $11,600, or 580 ounces of gold (or $20 paper bills, they were interchangeable then). The average cost of a new home today is roughly $500,000, or only 151 ounces of gold at the current price.

If we stayed on the gold standard, a house today would cost almost a fourth of what it did a century ago — deflation.

The more powerful example is with Bitcoin, which acts like gold because of its limited supply. The average price of a new home 10 years ago was $290,000. If you paid for it in Bitcoin, it would have cost you 1,160 Bitcoin. Today’s new $500,000 home costs a little more than four Bitcoin, which is trading now at about $120,000 — colossal deflation.

The third truly insidious form of taxation is regulation. Appointed, not elected, bureaucrats create regulations for, they claim, our health and safety. But most of it is to protect special interests or engineer behavior.

Regulation is how government gets what it wants without paying for it. They want homes to have electric-vehicle charging stations. They mandate it. You pay for it. It’s a tax.

Is a mandated brick home exterior or all-electric heating system needed for our health and safety? Regulatory compliance now makes up about 25% of the cost of a new home.

The untold story of the Jared Polis years is the explosion of Colorado’s regulatory state. The Mercatus Center released a report on regulations throughout the states. And congratulations, Colorado, we have skyrocketed to No. 12 in the number of regulations.

As of 2023, we have 165,994 regulatory restrictions. By contrast neighboring Kansas and Nebraska have around 75,000. Idaho clocks in at only 31,497 — five times less than us.

Colorado has 53,550 environmental restrictions, while the national average is close to half that. How much of your health care costs are from regulations? We have 13,719 restrictions on health care services, while the national average is only 4,673.

It’s not just that there are so many more regulations here. It’s that authorities to create even more regulations is growing like a cancer.

Take the Air Quality Control Commission. Just a few years ago, it was called the Regional Air Quality Council and had no real authority other than making recommendations. The legislature mutated it into a “commission” on par with the likes of the omnipotent Public Utilities Commission.

It now has near unlimited authority to regulate the state out of business. From banning gas-powered tools to forcing companies to require their employees to carpool, this unelected star chamber is working to make Colorado unaffordable.

Remember all three types of taxes as the legislature cries poverty.

Jon Caldara is president of the Independence Institute in Denver and hosts “The Devil’s Advocate with Jon Caldara” on Colorado Public Television Channel 12. His column appears Sundays in Colorado Politics.

Jon Caldara is president of the Independence Institute in Denver and hosts “The Devil’s Advocate with Jon Caldara” on Colorado Public Television Channel 12. His column appears Sundays in Colorado Politics.

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