California Voters to Decide High-Stakes Wealth and Local Taxes

California voters will decide on 14 statewide measures on the November 3 ballot, featuring a clash over wealth redistribution and local tax authority. Gavin Newsom signed Senate Bill 762 to allow 10 cities, two counties, and one town to exceed the state's 9.25% sales tax cap through 2031, as local governments rush to implement tax increases before the potential passage of Proposition 43. That measure seeks to overturn a 2020 Supreme Court of California ruling by reinstating a two-thirds voter approval requirement for single-purpose taxes placed on ballots via initiative petitions, rather than a simple majority.

Statewide, Proposition 40 proposes a 5% tax on the personal wealth of approximately 200 billionaires to fund healthcare, which would be the first wealth tax in the United States. Opponents have countered with Propositions 41 and 42 to mitigate these effects. Additionally, Proposition 3 aims to make a temporary income surtax on high earners permanent, potentially generating between $5 billion and $15 billion annually.

Legal and regulatory challenges continue to surround tax initiatives. The California Fair Political Practices Commission fined Nevada County $31,500 for using public funds to campaign for a 2022 tax measure. In the Bay Area, voters have filed suit in the Santa Clara County Superior Court to challenge the wording of a proposed $1 billion annual regional transit tax, alleging the language is promotional rather than neutral. The California Taxpayers Association has opposed SB 762, arguing that regressive sales taxes disproportionately harm low-income residents.