California voters will decide whether to make higher income tax rates on top earners permanent, rather than let them expire in 2031. Proposition 3 is a proposed constitutional amendment on the November 3, 2026, ballot.
The rates range from 10.3% to 12.3% and apply to income above specified thresholds. The measure would preserve the tax increase voters first approved in 2012, without an expiration date.
The California Secretary of State’s voter guide gives the measure’s title as “Provides permanent funding for schools and health care by extending existing tax on high incomes. Initiative constitutional amendment.” The Legislative Analyst estimates it would maintain billions of dollars in annual state revenue.
Nearly 376,000 taxpayers would remain in the higher brackets
The measure reaches roughly the top 2% of earners, or nearly 376,000 taxpayers based on 2024 data. The tax applies to wages, salaries, interest and profits from stocks, property and other investments.
The Attorney General’s summary uses 2025 income levels, adjusted each year for inflation. SPUR’s bracket figures show the rates by filing status:
| Filing status | 10.3% bracket | 11.3% bracket | 12.3% bracket |
|---|---|---|---|
| Single | $371,001–$446,000 | $446,001–$743,000 | Above $743,000 |
| Joint | $743,001–$892,000 | $892,001–$1.5 million | Above $1.5 million |
The official summary puts the approximate starting thresholds at $371,000 for single filers, $742,000 for joint filers and $505,000 for heads of household. Those figures are annual inflation-adjusted levels.
The measure would preserve billions for schools and health care
The Legislative Analyst’s estimate says the measure would maintain $5 billion to $15 billion in annual income tax revenue. If voters reject it, the higher brackets would end and the top rate would return to 9.3%, the rate before the 2012 increase.
The revenue allocation sends 89% to K-12 schools and 11% to community colleges. Any excess goes to public health care. Local school boards can decide how to spend school funds, but the measure bars administrative costs. SPUR estimates about 40%, or $2 billion to $6 billion annually, would count toward education funding required under Proposition 98. The remaining funds could support children’s health care, the Budget Stabilization Account and other General Fund programs.
That accounting also affects other state spending. Because the tax revenue counts toward required education funding, it frees General Fund money for other uses. SPUR says the tax has generated more than $119 billion for education and health care. Jeff Freitas, president of the California Federation of Teachers, said the tax has brought in $8 billion to $12 billion in annual public education funding in recent years, more than 10% of the state’s annual education budget.
Voters approved Prop. 30 in 2012 to help schools recover from the Great Recession, then extended the increase through Prop. 55 in 2016. If the tax ends, the state would need other revenue in the short term to meet education funding requirements. Over time, the Proposition 98 minimum could decline, depending on the formula, economic conditions and legislative decisions.
Teachers and civil-rights groups back the extension as opponents warn of departures
A September survey by the nonpartisan Public Policy Institute of California found 58% of likely voters supported the measure and 40% opposed it. The proposal has virtually no organized opposition, but supporters worry voters may confuse it with other tax measures on a crowded ballot.
The November ballot has 14 statewide propositions, five involving tax questions. They include Prop. 40, a proposed 5% one-time levy on the net worth of roughly 250 billionaires intended to raise $100 billion over five years, mainly for health care, and two measures written to derail it if approved. Supporters of Prop. 40 say roughly 200 people would be affected, compared with the hundreds of thousands subject to this income tax.
Freitas said the campaign against Prop. 40 could muddle voters’ views of this measure. The California Federation of Teachers, which represents 120,000 education workers, and the 310,000-member California Teachers Association are mobilizing members and funding get-out-the-vote efforts. The teachers’ association placed the measure on the ballot.
“The minimum funding guarantee for education could go down. That would also result in the state having to spend some more generous on revenue to meet the guarantee,” said Kayla Kitson, senior policy fellow at the California Budget and Policy Center.
Stephanie Aguon, secretary of the Lynwood Teachers Association and a California Teachers Association member, said the district could lose $47 million, affecting programs before, during and after school. David Goldberg, the association’s president, said defeat “will come at the expense of services for students and educators and communities across California.” The San Francisco teachers union, the California School Employees Association and SEIU California also support the measure.
The ACLU of Southern California endorsed a yes vote, saying the measure would preserve “$15 billion each year that currently funds public education and healthcare.” Executive director Chandra S. Bhatnagar said investment in education, affordable housing and health care has consequences for economic justice and civil rights.
Opponents say California already has the nation’s highest income tax rates and warn that wealthy residents could leave for lower-tax states, taking jobs and revenue with them. Susan Shelley, vice president of communications for the Howard Jarvis Taxpayers Association, argued that making a temporary tax permanent would set a poor precedent and burden small businesses whose owners pay taxes as individuals.
Assemblymember Carl DeMaio said wealthy residents could move their tax payments elsewhere: “That state gets the revenue. We get zero.” Goldberg countered that the tax is not new, saying high earners who planned to leave because of it would already have done so. California has one of the country’s highest emigration rates, but Public Policy Institute of California research finds high-income residents are less likely to leave than low- and middle-income residents. The leading reason residents give for leaving is unaffordable housing.
Tax advisers say permanence could shape relocation decisions
Advisers say clients may consider residency, Roth conversions and the timing of capital gains and other income. Samuel Diarbakerly, founder and CEO of Boston-based Generation Capital Advisors, said clients should make decisions around the lives they want, not taxes. He also noted some clients may leave if they face another dollar of tax, especially when higher federal rates and the net investment income tax also apply.
Diarbakerly recommends coordinating any domicile change with legal and tax advisers through a family-office approach. Jason Stephens, founder and managing partner of Naples, Florida-based Evertern Wealth, said the proposal could draw attention because it reaches millionaires and people below that level, not just billionaires.
SPUR supports the measure, citing its progressive structure and the absence of evidence that the tax has driven high earners out of California. It also notes that reliance on income tied to capital gains makes revenue volatile, while permanence would limit future tax flexibility.
