November Ballots Set Stage for National Clash on Wealth and Income Taxes

Key points

• California’s Proposition 40 would impose a one-time 5% tax on the net worth of residents with over $1 billion, targeting approximately 200 individuals. The measure requires a simple majority but faces opposition from billionaires who have contributed over $180 million to anti-tax groups. Two other propositions, 41 and 42, could nullify Prop 40 if they receive more votes, creating a complex voting scenario.
• Colorado voters will decide whether to replace its flat 4.4% income tax with a graduated system, raising rates to 7.4% for incomes over $500,000 and 8.4% for those over $1 million. The change is projected to raise $2.7 billion annually for public services but has drawn opposition from Governor Jared Polis and business groups concerned about competitiveness.
• Washington State voters will decide whether to repeal a 9.9% income tax on households earning over $1 million, which was passed in March 2026 and scheduled to take effect in 2028. Initiative 645 would also ban future income taxes, with supporters arguing the measure protects small businesses and opponents warning it would cut funding for education and healthcare.
• The votes reflect a broader national trend: some states are increasing taxes on high earners to fund public services, while others are cutting taxes to attract wealth. For example, Massachusetts’ millionaire tax has generated over $3 billion but coincided with a $4 billion loss in adjusted gross income from residents leaving the state.
• Polls show mixed support for these measures. In California, 45% support Prop 40 while 43% oppose it, with uncertainty likely to drive voters toward the status quo. In Colorado, the measure impacts the top 3% of taxpayers, while in Washington, the inclusion of budget impact language in the ballot measure has shifted public opinion against repeal.

Background

Recent developments in state tax policy have intensified the debate over wealth and income taxation. In 2022, Massachusetts implemented a 4% millionaire tax, which has raised significant revenue but also prompted high-earner migration. Rhode Island followed suit in 2026 with a phased 3% surcharge. Meanwhile, states like South Carolina, Arkansas, and Utah have passed income tax reductions, reflecting a competitive landscape for attracting high earners. These trends underscore the tension between raising revenue from the wealthy and maintaining economic competitiveness.

How outlets are covering it

CNBC emphasizes the polarization in state tax policies, noting that some states are raising taxes on high earners while others are cutting them to attract wealth. CalMatters highlights the complexity of California’s ballot, pointing out that Propositions 41 and 42 could undermine Prop 40 even if a majority supports the wealth tax. ALEC’s Jonathan Williams criticizes the proposed taxes as economically damaging, arguing they will drive wealth out of states like California and Colorado. NBC 7 San Diego provides a detailed breakdown of all 14 California propositions, underscoring the unprecedented number of tax-related measures on the ballot. The sources agree that these votes will have significant implications for state finances and wealth migration, but they differ in their emphasis on the potential consequences, with some focusing on revenue generation and others on economic competitiveness.

Why it matters

The outcome of these votes will determine whether states can raise revenue from high earners to fund public services or if they will lose wealth to other jurisdictions. The measures also reflect a broader national debate over the role of taxation in addressing inequality and funding public services. The results could influence future tax policies at the federal level and set precedents for how states approach wealth and income taxation.

What to watch

Voters in California, Colorado, and Washington will cast their ballots in November 2026, with results expected to shape state budgets and tax policies for years to come. The outcome of Proposition 40 in California will be particularly significant, as it could set a precedent for wealth taxes in the United States. In Colorado, the decision on the graduated tax will impact state competitiveness and public service funding. In Washington, the repeal of the millionaire’s tax could lead to broader tax cuts and reduced funding for education and healthcare. The results will also influence future tax policies at the state and federal levels, potentially shaping the national debate over wealth and income taxation.