Tax cuts are extremely popular among most voters, but difficult to write about in a way that hits home with your readers. These are classic pocketbook issues, yet our stories are usually heavy on numbers, bureaucratic language and political spin. Colorado had a $704 million surplus this year, a state record that prompted historic tax cuts. The question wasn't whether to cut or spend - constitutional spending limits mean surpluses must be returned to taxpayers - but who would get the tax breaks. When the proposed tax package emerged from the Colorado General Assembly, my statehouse colleague Michele Ames and I scrambled to make sense of it to readers. Who would be the real winners and losers if this passed? With only three days to write the first analysis for the Sunday edition, we decided to find several real people in our area, each representing a different socio-economic situation, and figure out how the specific tax proposals would affect them.
What we needed was a way to let individual taxpayers see how the proposed tax cuts would affect them directly.
Based on information they provided about their age, marital status, taxable income and investment exclusions, we calculated their individual tax bill under the new plan. The same type of analysis was done for a small business and a large manufacturer in our area.
We bolstered these findings by creating imaginary taxpayers and plugging their financial data into algebraic formulas for each tax cut proposal to get a larger sense of how it would impact various taxpayers.
It was a crude and tedious process, one that we desperately wanted to expand and refine.
But there's a tight lid on information about taxpayers. The Colorado Department of Revenue said it had no reason to track certain information - even on an aggregate level such as how many people currently file for certain exemptions, exclusions or deductions.
What we needed was a way to let individual taxpayers see how the proposed tax cuts would affect them directly.
That's when I heard about a creative approach to tax coverage being tried by New Hampshire Public Radio: a Web site devoted entirely to the issue in that state. Although their Web site was a massive project that had taken months to pull together, there was one element we could copy: an online calculator that lets people see how the tax cuts affect them directly.
Since the New Hampshire Web site hid the coding and formulas for the calculator, we had to start from scratch with little to go on.
Fortunately, our editors loved the idea. Unfortunately, they had no clue how difficult it would be and gave us only one week to pull it all together.
Calculator creation
In creating the calculator, we had no experience or examples to follow, and not even the state's top budget or tax experts had attempted anything like this - although some did offer to look over our work when done.
The idea was to give people a rough estimate of what they would save under each proposed tax reduction and a comparison of their final tax bill under the entire tax package versus the alternative - a straight refund of the surplus.
So we took each proposed tax cut and broke it down into an algebraic equation based on revenue formulas that ranged from one line to two pages in length.
For example, a proposed reduction of the state income tax rate from five to 4.7 percent looked like this: (your taxable income .05) - (your taxable income .0475) = tax savings.
No, we didn't make the public walk through these tortuous calculations.
We simply figured out what information we needed to know and narrowed it down to Feedback forms also helped generate great stories and new ways of thinking about how we could cover the tax debate in the future.