The California Secretary of State announced that a ballot initiative to make permanent the state’s top marginal tax rates on higher incomes, which are set to expire in 2031, has qualified for the November ballot. This will be the third ballot initiative related to this income tax, which was enacted in 2012 with the approval of Proposition 30 by 63% of voters and renewed in 2016 with the approval of Proposition 55 by 55% of voters.
The initiative would continue the higher marginal income tax rates on income above $361,000 for single filers and $721,000 for joint filers. The initial tax rate in 2012 applied to incomes above $250,000 for single filers and $500,000 for joint filers, and Proposition 55 extended the rate for these brackets until 2031. Propositions 30 and 55 did not contain mechanisms to adjust the bracket threshold in response to inflation increases. The proposed initiative increases the threshold and ties it to inflation.
In California, the income tax bracket applies to a filer's portion of income within that bracket. The chart below shows the current rates through 2030 and the tax rates if it is approved or rejected.
