What I Learned From My Conversation with Colorado Governor Jared Polis

by Hadley Heath Manning

On Friday, in beautiful Beaver Creek, CO, I had the opportunity to moderate a panel featuring Colorado Governor Jared Polis and economist Dr. Art Laffer. The Steamboat Institute hosted the panel as part of the organization’s annual Freedom Conference.

Gov. Polis is a Democrat. His party is, on most measures, heading in the opposite direction from Dr. Laffer in terms of economic policy: higher taxes, higher levels of regulation, and higher spending (see the $3.5 trillion infrastructure bill pending in Congress). Dr. Laffer is well known as the father of the “Laffer curve” and supply-side economics, an approach typically embraced by Republicans.

So the stage was set for an interesting conversation. Here were my observations as moderator:

Most notably, Gov. Polis said Colorado’s income tax should be zero. In this, he agrees with Dr. Laffer (and many other economists) who understand that taxation creates a distortion – specifically a disincentive – of whatever is being taxed. Income taxes discourage people from being productive and earning income. Furthermore, the federal government already taxes income, so states would be wise not to pile on. Gov. Polis seems to grasp this – he has a very in-depth knowledge of economic policy – and while politically it seems unlikely that Colorado will soon become the tenth state to eliminate its income tax, the governor’s comments are encouraging.

Gov. Polis saw the COVID-related enhanced jobless benefits as an all-or-nothing choice.  The governor described his decision to accept or turn down the $600-800 million in federal jobless benefits as an unfortunate choice: He would have preferred to use the money differently, for infrastructure investment or tax relief. But he took the money under the “something-is-better-than-nothing” philosophy, it seems. But sometimes something is worse than nothing. We know – and Dr. Laffer expanded on this in his remarks – that jobless benefits discourage employment, meaning they depress economic activity. An analysis of the impact of the jobless benefits should take this into account. It wasn’t just a gift of federal money, but a distortion of the state labor market.

In health care, Gov. Polis favors greater price transparency. This is a bipartisan issue – one that former President Trump really championed. Many free-marketeers, including Dr. Laffer, understand that we cannot have a strong, private, competitive (read: affordable) healthcare marketplace without transparent prices. Both parties seem to agree that our current healthcare policy (Gov. Polis called it “the legacy healthcare system”) isn’t working. It’s not competitive. But some on the political left suggest that we should have a ”public option” in health insurance to “compete” with private insurers. In fact, Gov. Polis signed a bill this summer creating a public option in Colorado (to launch in 2023).  Surely as a businessman he understands that government competition isn’t fair competition, and a better way to make the private market more competitive is to give patients price information, but the two approaches aren’t mutually exclusive.

On family leave policy, Gov. Polis sees the downside to Colorado’s latest policy. In 2020, Colorado voters passed – as a ballot initiative – a program that lawmakers struggled to get through the statehouse for years. The reason this program didn’t pass through the legislature, even a legislature controlled by Democrats, is because it’s costly. It will be harmful to Colorado’s economy. It imposes a new payroll tax on all workers in Colorado and redistributes that money inefficiently and even regressively. (I know, because I served on Colorado’s task force to explore family leave policies before voters passed this misguided program.) Gov. Polis (and I!) support other approaches to expand access to paid family leave without the downsides of this new tax-and-spend entitlement.

Gov. Polis said the best government is local government. Here is another point on which political conservatives and the governor can agree. Of course, the most local form of government is self-government — the individual. Individuals can decide how to best chart their lives, and government should interfere with that as little as possible. Sadly, many politicians – and it seems also Polis – support the principle of local control so long as localities are free to change policy in a way they like (higher minimum wages, different mask rules, etc.) If we really believe in local control, we should be consistent. And of course, as the governor said, we should be civil.

Gov. Polis had a lot to say on the topic of civility in politics. But even more important than his words was his example: He engaged civilly and respectfully on the panel, even when my questions (or Dr. Laffer’s comments) challenged his position. We should all be willing to have a conversation across the aisle, and to do so in good faith. More conversations like these will yield a better public discourse, better politics, and better policies. At the very least, we can understand both sides of the issues better. As John Stuart Mill said, “He who knows only his own side of the case knows little of that.” I’m confident Gov. Polis understands both sides of many issues; I just hope that he will pick the right side on as many policy battles as he can.

Hadley Heath Manning is the policy director at the Independent Women’s Forum and a Tony Blankley Fellow at Steamboat Institute.