The tax-the-rich movement that has stirred ire among Silicon Valley billionaires and Seattle’s ultrawealthy has found its way to the Rocky Mountains.

In Colorado, where Aspen is a playground for the rich and Denver attracts newcomers for its outdoorsy lifestyle, voters are considering a measure that would raise income taxes on the highest earners. Amendment 87 — which last week survived a court challenge — would replace the state’s 4.4% flat income tax with a graduated system, with higher rates kicking in for households making more than $500,000 in taxable income and reaching 8.4% on income above $1 million.

The proposal is part of a broader push playing out across the West over how much the wealthiest residents should contribute — and how far states can go before they risk losing the people and businesses that generate much of their tax revenue. California voters are considering a one-time 5% levy on billionaire wealth, while Washington residents will decide whether to repeal a new 9.9% tax on annual income above $1 million.

Colorado’s measure would apply to both individuals and corporations, drawing opposition from the chamber of commerce and Democratic Governor Jared Polis. Supporters argue that the levy is relatively small, given it only covers marginal income, and that 97% of taxpayers will pay less under the proposed structure. The additional revenue would go toward education, healthcare and childcare.

Graduated income taxes are hardly unusual: A majority of US states have them. But the shift would be a marked change for Colorado, whose relatively low flat tax has been part of the appeal for affluent newcomers drawn to cities such as Denver and Boulder for their quality of life. Since the pandemic, the ski enclave of Aspen has gained even more prominence as a year-round haven for the ultrawealthy.

Curtis Bankers, a Denver-based estate and tax planning attorney, said he has fielded calls from clients who are considering moving should the amendment pass. Many wealthy Coloradans may already own property in lower-tax states like Wyoming, Utah and Arizona, he said, making it easier to change residency.

“All of my clients would be affected by this,” Bankers said. “The main takeaway is they’re all very worried.”Aspen Mayor Rachael Richards is supporting the measure. She said roads are in need of repair, and the state gasoline tax hasn’t been raised in over three decades due to unique restrictions on tax increases in Colorado. In addition, the state is facing a lapse in federal funding for Medicaid.

“We’re not investing as a state in the way it needs to,” Richards said, adding that many of Aspen’s wealthier homeowners keep their primary residences in a different state anyway. The risk of rich people leaving is “not a real concern for me,” she said.

Under Amendment 87, households earning more than $1 million would see their tax burden increase by $26,085 on average, according to a state analysis. It would likely decrease the tax bill for people with state taxable income of less than $510,834, the analysis shows. Colorado has an estimated 102,228 taxpayers with income over $500,000.

“This is a fair tax,” said Kathy White, executive director of the Colorado Fiscal Institute, part of the coalition that gathered signatures to put Amendment 87 on the ballot. “It asks the wealthiest 3% of people and the most profitable corporations to do a little more, and it cuts taxes for the 97% of average working families.”Colorado is constrained in its ability to raise revenue because of its Taxpayer’s Bill of Rights amendment, known as TABOR, which was enacted in the 1990s and limits how much money the state can retain and spend. Amendment 87 would change TABOR to allow for graduated tax rates and is expected to raise about $2 billion annually once fully implemented.

Polis, a moderate Democrat who is term-limited and can’t run for reelection in November, has said he’s concerned that the tax increase would have ripple effects for businesses and Colorado’s economy. It would be directed toward a fund that puts proceeds toward K-12 education, healthcare and childcare, with a public audit each year to ensure the money is used appropriately.

“The substance of the issue is that Amendment 87 would raise taxes by over $2 billion, much of it from doubling the taxes on small and mid size businesses, all without guaranteeing how much will go to education and classrooms,” Polis said in a statement.

The Republican candidate for governor, Victor Marx, has said he opposes the graduated income tax. Democratic candidate Phil Weiser, who serves as the state’s attorney general, hasn’t taken a position, citing his role in litigation around the measure.

Dan Caruso, the founder of a company that invests in tech in Colorado, has spoken out against the measure. “Capital is mobile, and so are the people who direct it,” he wrote in an editorial in the Denver Gazette.

“This is just one more thing that’s going to drive these businesses either to leave or just not come here,” said Loren Furman, the chief executive officer of Colorado Chamber of Commerce. She said businesses are frustrated by an increasing number of rules and regulations in the state over the last 10 to 15 years.

There have been almost 100 corporate relocations or lost opportunites to other states from 2019 to 2025, the chamber found. Palantir Technologies Inc. moved its headquarters from Denver to Miami earlier this year. Asset manager TIAA closed its regional office in Denver and relocated positions to a new hub outside of Dallas.

It’s unclear if residents would actually move over new taxes. A 2016 study concluded that tax flight occurs, “but only at the margins of statistical and socioeconomic significance.”In Massachusetts, where voters passed a millionaires tax in 2022, revenue from the levy has exceeded estimates.

And while prominent billionaires such as Sergey Brin and Larry Page have moved ahead of the vote on California’s wealth tax, rich residents such as Nvidia Corp. CEO Jensen Huang have said they have no issue with it. Meta Platforms Inc. went so far as to create a new class of nonvoting shares for Mark Zuckerberg to offset the potential payout and keep the co-founder from leaving the state.

In Colorado, income tax rates would still be lower than places such as New York and California. And many people move to the area for lifestyle reasons, rather than just finances.

“They have season Bronco tickets,” said White of the Colorado Fiscal Institute. “Their kids go to a great school down the street and all their friends are here. There are so many things that tie people to their place.”Aaron Brockett, mayor of the liberal-leaning city of Boulder, says graduated income taxes are more progressive and better policy than a flat income tax, noting that the increase is marginal for wealthier residents. Still, he hopes they stay. “We value having them here,” he said.