Prop. 3 explained: Making the high-earner income tax permanent

SAN JOSE - Proposition 3 asks voters whether to make permanent the higher state income tax rates on high earners that voters first approved in 2012 with Proposition 30 and extended in 2016.  Under current law, those rates end after 2030.  It is a citizen initiative, placed on the ballot by signatures.

What it would do

The higher rates apply to income over about $371,000 for single filers, $742,000 for joint filers and $505,000 for heads of household, at 2025 levels adjusted for inflation.  The LAO says these are the top 2 percent of California taxpayers.  It does not raise the current rates.  The Legislative Analyst's Office (LAO) says it would keep between $5 billion and $15 billion a year in state revenue that would otherwise disappear.

Who would be affected

Taxpayers with the highest incomes would keep paying the higher rates after 2030.  Public schools and community colleges would receive roughly 40% of the money, according to the LAO, and the rest would go to other state programs and reserves.

What it would cost

For the state budget, the LAO says the measure keeps revenue rather than costing money.  Revenue swings with the stock market, from about $5 billion in a weak year to $15 billion in a strong one.

Supporters and why

Supporters include the California Teachers Association, the California School Nurses Organization, the California State PTA and Planned Parenthood Affiliates of California.  They say ending the rates would cut school and health funding.

"Proposition 3 is NOT a new tax and does NOT raise taxes on anyone." - Argument in favor of Prop. 3

Opponents and why

Opponents include the California Taxpayers Association, the Family Business Association of California and the California Hispanic Chambers of Commerce.  They say the tax was promised as temporary.

"In 2012, politicians and special interests promised Californians that their income tax increases would be TEMPORARY." - Argument against Prop. 3

Where the parties stand

The California Democratic Party recommends yes; the California Republican Party opposes.  In the IGS poll, 83% of Democrats and 8% of Republicans said yes.  PPIC found most Democrats and independents in support and most Republicans opposed.

The money

The largest Yes contributions listed by the Secretary of State come from teachers unions:  several checks of $5 million to $15 million each from the California Teachers Association's Issues PAC, and $4 million and $3 million from the National Education Association.  The No side's largest listed contribution is $5,000 from the Family Business Association of California's committee.

Polling

PPIC found a majority of likely voters in support, with about four in ten opposed, similar to its September result of 58% yes and 40% no.  In a Berkeley Institute of Governmental Studies (IGS) Poll of likely voters taken Oct. 19-25 and released Oct. 29, 54% said yes, 37% no and 8% were undecided.

What your vote means

A yes vote means the income tax increase on high earners in place since 2012 becomes permanent.  A no vote means the rates end after 2030 as scheduled.

Source:  Secretary of State, Voter Information Guide, Prop. 3; Legislative Analyst analysis, Prop. 3; Official arguments and rebuttals, Prop. 3; Secretary of State Quick Guide to Props, Prop. 3; California Democratic Party endorsements; California Republican Party endorsements; PPIC Statewide Survey, October 2026; Berkeley IGS Poll Release #2026-22