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California voters will soon be asked whether they want to keep taxing the incomes of the rich.
And they’ll be asked whether to start taxing the accumulated wealth of the even richer.
Wait, there’s more. They’ll also get to weigh in on whether we should ban wealth taxes altogether, subject the money raised by future taxes to a state spending cap and make it harder for voters to pass certain local taxes.
That doesn’t include any of the other propositions on the November ballot that are likely to affect the state budget. Nor does it include the roughly 300 tax and bond measures that will be popping up in local elections across the state.
And you thought tax season only came in April.
With 14 measures in total, the 2026 California ballot is a busy one. Voters haven’t been presented with this many choices in a decade. It’s an especially active year for tax-related measures — those that hike taxes, cut them, introduce new ones, jettison old ones or change the rules by which taxes are approved and enacted.
Five of those are on the ballot this time around, the most since 1994.
Altogether they have the potential to reshape the state’s finances, beef up or starve some of our largest public spending programs, change the rules around taxation and — if opponents of the proposed wealth tax are to be believed — trigger a Randian exodus of the state’s wellest-to-do.
The ‘black hole’ on the ballot
Though five tax measures are on the ballot, voters are really just seeing three big questions.
The first: Should California be the first state in the nation to introduce a wealth tax?
That question is “the black hole into which all political energy is going right now,” said Jon Coupal, president of the Howard Jarvis Taxpayers Association, a group that advocates for low taxes.
Three measures — Propositions 40, 41 and 42 — provide opposing answers.
Prop. 40 would slap every Californian with a net worth of at least $1 billion (all approximately 200 of them) with a one-time 5% tax on their wealth, excluding real estate and retirement accounts.
This isn’t an income tax, which skims off a share of a person’s earnings, but a tax on the assessed, unrealized value of investments. Think of this like the property tax that homeowners pay on their houses, except it applies to stocks, bonds, business shares, Bugattis and the occasional machine gun collection.
The Legislative Analyst’s Office estimates that the measure has the potential to raise tens of billions of dollars. Almost all of it would be set aside for the state’s public health insurance programs, which are bracing for dramatic federal cuts.
That’s assuming the measure passes and survives the blizzard of inevitable legal challenges. Though a number of countries have introduced wealth taxes at either the national or regional level, California’s would be the first in the United States.
No surprise, many of the state’s billionaires are pushing back hard. They’re doing that in the usual way, with literally hundreds of millions of dollars in campaign spending. But they’re also doing it with two additional measures on the ballot itself. Prop. 41 would, among other things, ban the state from collecting taxes that circumvent a 1970s state spending limit, which Prop. 40 is written to do.
Prop. 42 would ban new taxes on financial assets, private businesses and most other forms of wealth outright — an explicit reversal of Prop. 40.
If both the wealth tax and either of the countermeasures are approved by the voters, the one with the higher vote tally becomes law. That’s why the wealth tax could go down in defeat even if a majority of voters support it.
But voters shouldn’t think of Props. 41 and 42 as mere “no” votes on Prop. 40, said Kayla Kitson, a tax policy analyst at the California Budget & Policy Center, a left-leaning think tank. Prop. 41 would also require the state’s auditor to conduct a “pre-election” analysis of any program set to be funded by a future tax measure and then make recommendations on how to cut costs by 10%.
Beyond banning future wealth taxes, Prop. 42 would also prevent future taxes from applying retroactively before a tax is approved. That could remove the state’s ability to keep people or businesses from avoiding a tax they know is coming, said Kitson.
Two more tax questions
The other two tax measures have nothing to do with the wealth tax. One would make permanent a boosted income tax rate for higher earners. The other would make it harder for local governments to raise certain taxes in the future.
The high-earner tax is the third, and possibly final, installment in a decade-long electoral trilogy.
First proposed by former Gov. Jerry Brown as a temporary solution to fund education in the fiscal hangover of the Great Recession, the measure sticks a higher tax bracket on the state’s top 2% of earners. Re-authorized by voters in 2016, the tax has generated between $5 billion and $16 billion annually. Most of that money has gone to schools.
The tax expires in 2030, which is why the California Teachers Association, the state’s largest K-12 public school educators’ union, was eager to put its permanent renewal on the ballot this year. If it fails, the union will have two more chances.
Hence, Proposition 3, which would make the boosted tax rates for individually earned income above $360,000 per year a perpetual part of the state’s tax code.
Proposition 43’s backstory also goes back nearly a decade.
The measure would hike the share of votes needed to pass certain local taxes. Specifically, these are taxes that raise money for a specific program or purpose and that are placed on the ballot by citizen signature-gathering efforts, as opposed to local elected officials. If Prop. 43 passes, this very particular type of tax would need the support of at least two-thirds of local voters.
Business groups and anti-tax advocates have been wanting to put some version of Prop. 43 on the ballot since 2017 when the state Supreme Court ruled that so-called citizen-initiated special taxes only need a simple majority of the vote to pass. The anti-tax advocates got close two years ago, but were stymied by another court ruling. This year, the measure finally made it, but only after negotiations with the Democrats in the Legislature pared it down, applying the rule to future taxes only.
California tax measures tend to fail
This all makes for a tremendously confusing voting experience for most Californians.
That’s probably bad news for the supporters of these measures, since uncertain voters tend to err on the side of “no,” said Mark Baldassare, survey director at the Public Policy Institute of California.
“When voters aren’t sure how to proceed, staying with the status quo and letting someone else decide at a later date is a safe bet,” he said.
That may partly explain why tax measures, which are inherently complicated and tend to come with unpredictable consequences, fare especially poorly on the ballot. Since 2000, a solid majority (57%) of non-tax ballot measures have passed compared to a mere third of tax propositions.
The sheer number of open questions surrounding the proposed wealth tax (Is it constitutional? Can the state effectively implement it? Will all the billionaires flee to Florida?) puts it on shakier footing with an electorate that tends to reject uncertainty, said Baldassare. A narrow majority of 52% percent of likely voters said they supported the measure in a recent PPIC poll.
The tax on high earners in Prop. 3, may face better odds because it makes permanent an existing tax rather than introducing a new one. In the same poll, 58% of likely voters indicated that they would support the measure.
“When people see the words ‘renew’ or ‘extend’ it gives them a sense that this is the status quo, we’re not being asked to make a change here,” he said.
But Prop. 3’s backers shouldn’t take too much comfort in that. Support for propositions tend to decline as Election Day approaches. The sheer number of tax measures on offer could also inflict voters with “tax fatigue” leading them to vote “no” across the board, said Baldassare.
Then there’s the general political vibe.
Earlier this year, PPIC asked a sample of Californians whether they preferred lower taxes and fewer services or higher taxes and more services.
Fifty-five percent said they’d prefer the lower tax bill.
