5 States Vote for Major Changes to Income Tax
Summary
Voters in five states approved measures that either raise or preserve higher income taxes on top earners or make future tax increases harder. Colorado, California and Washington backed tax measures, while North Carolina and Iowa approved limits on lawmakers’ ability to raise income taxes.Key Facts
- Colorado voters approved replacing the state’s 4.4 percent flat income tax with six graduated rates from 3.7 percent to 8.4 percent, starting in 2027.
- Colorado’s highest income tax rate will apply to taxable income above $1 million.
- Colorado’s tax changes are projected to raise nearly $2 billion in additional revenue in fiscal year 2027-28.
- California voters made higher income tax rates on the state’s top earners permanent; the rates had been due to expire in 2031.
- Washington voters rejected an initiative to repeal the state’s 9.9 percent tax on annual income above $1 million.
- Washington’s new tax is scheduled to take effect on January 1, 2028, and applies to taxable income above $1 million.
- North Carolina voters approved a constitutional amendment lowering the maximum state income tax rate to 3.5 percent.
- Iowa voters approved a measure making future income tax increases more difficult, but the article excerpt does not provide further details.
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