Federal taxes dominate the headlines, but state and local taxes make up a significant share of the total tax burden for households across the country. This November, voters in at least three states will decide on major income tax measures — proposals that take sharply different approaches to taxing high earners and wealth. Here is a factual breakdown of each measure, including what it would do, who would be affected, and what supporters and opponents on both sides are saying.
1. Colorado — Amendment 87: Graduated Income Tax
Colorado currently imposes a flat income tax rate of 4.4% on all taxable income. Amendment 87 would replace that flat rate with a six-tier graduated system, effective for tax years beginning on or after January 1, 2027. The proposed marginal rates would range from 3.7% to 8.4%, with the top rate applying to taxable income above $1 million. The graduated rates would apply to individuals, estates, trusts, and corporations.
Under the proposal, Coloradans with taxable income below $500,000 would generally pay less in state income taxes than they do under the current flat rate. Those with taxable income of approximately $500,000 or more would generally pay more, with the increase growing substantially at higher income levels. The Colorado Legislative Council Staff estimates the measure would raise approximately $2.7 billion in additional state revenue in the first full fiscal year. Proceeds would reportedly be directed toward K-12 public education, healthcare, and early childhood care and education.
The Protect Colorado's Future coalition and groups including the Bell Policy Center argue the measure would reduce taxes for 97% of Colorado taxpayers while directing more revenue to education, healthcare, and child care from households with the highest incomes.
Americans for Prosperity-Colorado and the Colorado Chamber of Commerce oppose the measure, raising concerns about the state's business climate, economic competitiveness, and changes to Colorado's Taxpayer's Bill of Rights.
2. California — Proposition 40: One-Time Billionaire Wealth Tax
Rather than changing income tax rates, California's Proposition 40 would impose a one-time 5% levy on net worth — not income — for individuals who were California residents on January 1, 2026, with net worth measured as of December 31, 2026. The tax would generally exclude real estate and certain pension and retirement accounts. Payment would be due in 2027, with an option to spread payments over five years at an additional annual deferral charge.
The state Legislative Analyst's Office estimates the measure could generate tens of billions of dollars over several years, while noting that changes in taxpayer behavior — including the possibility that some high-net-worth individuals might leave California — could reduce state income tax revenue by less than $1 billion annually. Under the measure, 90% of proceeds would go to health care, with the remainder directed toward education, food assistance, and administrative costs.
Backers led by SEIU-United Healthcare Workers West, along with U.S. Sen. Bernie Sanders, the California Democratic Party, and several labor and healthcare groups, argue the tax would help replace healthcare funding reduced by federal cuts.
Governor Gavin Newsom and a broad coalition — including the California Business Roundtable, California Medical Association, California Teachers Association, California Professional Firefighters, and Planned Parenthood Affiliates of California — oppose the measure. Critics argue a one-time wealth tax could make state revenues more volatile, discourage high-net-worth residents from remaining in the state, and reduce future income tax revenue.
3. Washington — Initiative 645: Repeal the Millionaire's Tax?
Washington's ballot question is structured differently: rather than asking voters to approve a new tax, Initiative 645 asks them to repeal one already enacted. In March 2026, Senate Bill 6346 established a 9.9% tax on individual and household income above $1 million, scheduled to take effect January 1, 2028, with first payments due in 2029. The $1 million threshold would be adjusted for inflation annually, and the tax would apply only to income above that amount. If I-645 passes, the tax would be repealed and state and local governments would be prohibited from imposing taxes measured by or imposed on individual income.
The state's current fiscal analysis estimates that repealing the tax would reduce state revenue by approximately $11.4 billion over five fiscal years, with most of the impact on the state general fund and reductions to an account supporting child care and early learning. If the tax remains in place, it is expected to raise between $3 and $4 billion per year beginning in 2029. According to the Tax Policy Center, roughly 25,000 households would be subject to it.
Let's Go Washington, the campaign behind I-645, argues that Washington should preserve its longstanding absence of an individual income tax, and contends that the new tax could negatively affect families, businesses, and the state's broader economy.
Governor Bob Ferguson and a coalition including public-sector unions oppose I-645, arguing that eliminating the tax would significantly reduce funding available for education, health care, child care, and other public priorities.
4. What to Consider Before You Vote
State tax ballot measures are rarely straightforward. Here are four questions worth asking before casting a vote on any of these — or on similar measures in other states:
- Read the official ballot language. Campaign materials on both sides emphasise the aspects of a measure that favour their position. The official ballot language explains what a "yes" or "no" vote actually does.
- Look beyond the tax headline. A 9.9% tax on income above $1 million, for example, is not a 9.9% tax on a household's total income — only on the amount above the threshold.
- Check who is actually affected. Income thresholds, residency requirements, exemptions, and definitions of taxable income or net worth can substantially change the scope of who pays.
- Consult independent fiscal analyses. Supporters and opponents may make competing claims about revenue effects and economic impact. Your state's independent legislative analyst or fiscal office provides a non-partisan reference point.
These three states are not the only ones with tax-related measures on November ballots. Check your own sample ballot and consider what a particular measure would mean for your household's tax position as well as for public services and funding in your state.
If any of these measures pass, additional implementation decisions, court challenges, and updated revenue estimates will likely follow — so continued monitoring will matter even after Election Day.
Planning note: If you live in Colorado, California, or Washington, or have income sourced in those states, the outcome of these measures could affect your 2027 or 2028 tax position. It is worth discussing contingency planning with your adviser before results are known. Schedule a session with our team to model the potential impact on your situation.
Questions about how state tax developments could affect your federal or multistate filing position? Contact our CPAs for personalised guidance.
