U.S. States Pass High-Earner Income Taxes Despite Wealth Tax Defeat
Voters in several U.S. states approved income tax hikes for high earners while rejecting a billionaire wealth tax in California.
U.S. voters and legislatures showed strong support for increasing taxes on high earners during the 2026 midterm elections, though efforts to tax overall net worth faced significant setbacks. In California, voters rejected Proposition 40, which proposed a one-time 5% tax on the net worth of billionaires. The measure was defeated following a nearly $400 million opposition campaign led by Sergey Brin and other wealthy individuals.
Despite the wealth tax failure, California voters approved Proposition 3, making income tax surcharges for high earners permanent. Similar trends appeared in Washington, where voters backed a 9.9% income tax on households earning over $1 million, and Colorado, where voters approved a graduated income tax via Amendment 87. In Missouri, voters rejected a measure that would have eliminated the state income tax entirely.
Legislative action mirrored these ballot results, with Maine, Hawaii, and Rhode Island enacting new income tax surcharges for millionaires. Local governments also targeted high-value assets; New York City implemented a pied-à-terre tax on non-primary residences, and Boulder, Colorado, introduced a residential vacancy tax. While income and property taxes gained traction due to ease of calculation, the defeat of Proposition 40 highlighted the difficulty of passing broad wealth taxes at the ballot box.
