5 States Vote for Big Changes to Income Tax

Voters in five U.S. states made major decisions about income taxes during the November 3 midterm elections. Colorado, California, and Washington chose to raise or keep higher taxes on wealthy residents. North Carolina and Iowa went the other way, passing rules that make it harder for lawmakers to raise taxes in the future. Together, these votes show that Americans have very different ideas about how the government should collect money.

In Colorado, voters approved Amendment 87, which changes how the state collects income tax. Right now, every Colorado taxpayer pays the same flat rate of 4.4 percent. Starting in 2027, the state will use six different rates, ranging from 3.7 percent to 8.4 percent. People who earn more money will pay a higher rate, while most taxpayers — those earning less than about $510,000 — are expected to pay less. The state expects to collect nearly $2 billion more each year from this change, and that money will go toward schools, health care, and programs for young children.

California voters approved Proposition 3, which makes the state's higher tax rates on wealthy residents permanent. These higher rates were first approved in 2012 and were set to expire in 2031. They apply to roughly the top 2 percent of earners — people making about $371,000 or more per year. The state's Legislative Analyst's Office estimated that keeping these rates will preserve between $5 billion and $15 billion in revenue every year. About 40 percent of that money goes to public schools and community colleges, with the rest supporting other state programs.

In Washington state, voters rejected Initiative 645, which would have gotten rid of a new tax on millionaires. The state legislature had already passed a 9.9 percent tax on income above $1 million, set to take effect on January 1, 2028. The initiative would have repealed that tax and even banned any future income taxes in the state. By voting it down, Washington residents chose to let the new millionaire tax move forward. Revenue from the tax will support education, health care, and programs like the Working Families Tax Credit.

North Carolina voters approved a constitutional amendment that lowers the maximum income tax rate allowed under state law. The cap was reduced from 7 percent to 3.5 percent, meaning lawmakers can never raise the income tax above that level without changing the constitution again. The state's current tax rate is already close to 3.5 percent, so most taxpayers won't see an immediate change. However, this amendment limits what the government can do in the future if it needs more money for public services. Supporters say it protects taxpayers, but critics worry it could hurt the state's ability to pay for schools, roads, and other needs.

Iowa voters passed Amendment 1, which makes it much harder to raise income taxes in the future. Before this vote, the state legislature could raise taxes with a simple majority — meaning just over half of lawmakers had to agree. Now, two-thirds of lawmakers in both the House and the Senate must vote in favor before income taxes can go up. That means at least 67 out of 100 House members and 34 out of 50 senators must say yes. Supporters say the change keeps taxes low, while opponents warn it could make it harder for Iowa to handle budget problems down the road.

These five votes show just how differently people think about taxes across the country. Some states believe that asking the wealthy to pay more is the right way to fund important services like schools and health care. Others believe the government should be limited in its power to collect taxes. While many of these changes won't affect tax bills right away, they will shape how these states raise money and pay for public services for years to come.