State Tax Ballot Measures to Watch on Election Day 2022

Notable 2022 Tax Ballot Measure Results

As of 4:00 p.m. ET, November 9, 2022
Result	Ballot Measure	For	Against	% In
Leading	Arizona Proposition 132	51%	49%	97%
❌	California Proposition 30	41%	59%	40%
✔️	Colorado Proposition FF	55%	45%	80%
✔️	Colorado Proposition 121	66%	34%	81%
✔️	Idaho Advisory Ballot	80%	20%	75%
✔️	Massachusetts Question 1	52%	48%	84%
✔️	Missouri Amendment 3	53%	47%	89%
❌	West Virginia Amendment 2	35%	65%	95%

On Election Day, most eyes will be on Congress, with polls showing control of both chambers up for grabs. But the action is not limited to Washington, D.C.: across the country, voters will decide important questions through state and local ballot measures. At the state level, 25 measures in 12 states relate to taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. policy. And while some of these deal with relatively minor policy details, eight stand out. We summarize each of these ballot measures below and link to more extensive discussions of several of them.

These measures include both income tax increases (in California, Colorado, and Massachusetts) and income tax reductions (also in Colorado). Voters in Arizona will consider adopting supermajority requirements for future ballot-initiated tax increases. Cannabis legalization and taxation continue to crop up in additional states. And in West Virginia, lawmakers are asking voters to grant them the authority to reform the state’s tangible personal property taxA property tax is primarily levied on immovable property like land and buildings, as well as on tangible personal property that is movable, like vehicles and equipment. Property taxes are the single largest source of state and local revenue in the U.S. and help fund schools, roads, police, and other services. system.

Arizona Proposition 132

Arizona Proposition 132 is a legislatively referred constitutional amendment that would modify the Arizona constitution to require ballot measures authorizing a tax to be approved by at least 60 percent of votes cast. Under the current system, a ballot measure imposing or increasing a tax only needs the approval of a simple majority—50 percent plus one. Such was the case in 2020 with Proposition 208, which attempted to impose a 3.5 percent surtaxA surtax is an additional tax levied on top of an already existing business or individual tax and can have a flat or progressive rate structure. Surtaxes are typically enacted to fund a specific program or initiative, whereas revenue from broader-based taxes, like the individual income tax, typically cover a multitude of programs and services. on income above $250,000. To impose new taxes or to increase taxes in the Arizona legislature requires a two-thirds majority.

California Proposition 30

California Proposition 30 would create a 1.75 percentage point surtax on income above $2 million, which would bring the top marginal rate to 15.05 percent. (Separately, the scheduled uncapping of a 1.1 percent payroll taxA payroll tax is a tax paid on the wages and salaries of employees to finance social insurance programs like Social Security, Medicare, and unemployment insurance. Payroll taxes are social insurance taxes that comprise 24.8 percent of combined federal, state, and local government revenue, the second largest source of that combined tax revenue. in 2024, combined with the passage of Proposition 30, would yield a 16.15 percent top rate on wage income.) The projected $3 to $4.5 billion in revenue would be earmarked for zero-emission vehicle infrastructure and purchasing incentives, but the measure—championed by Lyft, which would benefit from the EV rebates as it transitions to a zero-emissions fleet—has divided policymakers on the Left in addition to generating opposition on the Right. The surtax contains a marriage penaltyA marriage penalty is when a household’s overall tax bill increases due to a couple marrying and filing taxes jointly. A marriage penalty typically occurs when two individuals with similar incomes marry; this is true for both high- and low-income couples. and would not be adjusted for inflationInflation is when the general price of goods and services increases across the economy, reducing the purchasing power of a currency and the value of certain assets. The same paycheck covers less goods, services, and bills. It is sometimes referred to as a “hidden tax,” as it leaves taxpayers less well-off due to higher costs and “bracket creep,” while increasing the government’s spending power. . Click here for the Tax Foundation’s full analysis of Proposition 30.

Colorado Proposition FF

Colorado Proposition FF would create a tax cliff and introduce a marriage penalty in an effort to limit both standard and itemized deductions for high earners. The revenue from this limitation would fund a universal school meals program. Legislation enacted this year already requires Coloradans with taxable incomeTaxable income is the amount of income subject to tax, after deductions and exemptions. For both individuals and corporations, taxable income differs from—and is less than—gross income. of $400,000 or more to add back itemized or standard deductions over $30,000 ($60,000 married filing jointly). Proposition FF would tighten those caps to $12,000 ($16,000 married filing jointly)—below federal treatment—even before taxes can be paid under the new rules. Click here for the Tax Foundation’s full analysis of Proposition FF.

Colorado Proposition 121

Colorado Proposition 121 would reduce the statutory income tax rate from 4.55 percent to 4.4 percent, retroactively effective for tax year 2022. Although revenues in coming years are expected to trigger TABOR reductions, statutory rate reductions enable investment and other decisions to be made in anticipation of a lower tax burden, providing more economic benefit than after-the-fact temporary tax relief. Click here for the Tax Foundation’s full analysis of Proposition 121.

Idaho Advisory Ballot

In Idaho, an error-riddled ballot initiative to create a new top marginal income tax rate of 10.925 percent was pulled from the ballot after lawmakers adopted legislation in a special session creating a 5.8 percent single-rate income tax with a higher standard deductionThe standard deduction reduces a taxpayer’s taxable income by a set amount determined by the government. It was nearly doubled for all classes of filers by the 2017 Tax Cuts and Jobs Act (TCJA) as an incentive for taxpayers not to itemize deductions when filing their federal income taxes. while simultaneously providing additional funding for public education. The withdrawn ballot measure would have reversed a previously adopted across-the-board tax cut, created a large tax cliff, and instituted an inverted inflation adjustment. Proponents initially argued these problems could be fixed legislatively but ultimately chose to pull the measure and lend support to new state legislation championed by Gov. Brad Little (R) that would have preempted it. In place of the former Proposition 1, Idaho voters will weigh in on an advisory question approving or disapproving of the legislature’s action. Click here for a summary of the legislation in question, and click here for our analysis of the former Proposition 1.

Massachusetts Question 1

Massachusetts Question 1 is a legislatively referred constitutional amendment that would modify the state’s constitution to add a 4 percent surtax to the current 5 percent individual income taxAn individual income tax (or personal income tax) is levied on the wages, salaries, investments, or other forms of income an individual or household earns. The U.S. imposes a progressive income tax where rates increase with income. The Federal Income Tax was established in 1913 with the ratification of the 16th Amendment. Though barely 100 years old, individual income taxes are the largest source of tax revenue in the U.S. rate for annual income above $1 million. Massachusetts has had a flat-rate individual income tax since 1917. If approved, the amendment would effectively transition the state to a graduated income tax on January 1, 2023. Further analysis of the amendment, including its potential economic impact, is available here.

Missouri Amendment 3

Missouri Amendment 3 is one of the most comprehensive measures related to marijuana to appear on state ballots this November. This proposed constitutional amendment would remove state prohibitions on purchasing, possessing, consuming, using, delivering, manufacturing, and selling marijuana for personal use by adults over the age of 21 and would impose a six percent tax on the retail price of recreational marijuana. State revenue estimates suggest initial revenues of $7.9 million for the state and $13.8 million for local governments. In addition, persons with certain marijuana-related, non-violent offenses would be permitted to petition for release from incarceration or parole and probation and have their criminal records expunged. Click here for the Tax Foundation’s full analysis of this and other ballot measures related to cannabis legalization and taxation.

West Virginia Amendment 2

West Virginia Amendment 2 would grant the legislature the authority to reform tangible personal property taxes in the state. West Virginia is unusual in not only taxing business machinery and equipment but also business inventory and vehicles, including personal vehicles. Policymakers have long sought to reduce reliance on these taxes by using state revenue to backfill reduced local tangible property tax collections, but their ability to do so is contingent upon a constitutional change. Click here for the Tax Foundation’s full analysis of Amendment 2.

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