Next Tuesday, two states vote on taxes. California decides on the nation's first wealth tax aimed at billionaires. Colorado decides whether to drop its flat income tax. This desk doesn't pick sides on a ballot. Here's what's printed, and what it could mean for a plan.
Start with California. The measure is a one-time 5% tax on net assets. It applies to residents worth $1 billion or more at the end of 2026. The tax falls on stocks, bonds, private business stakes, intellectual property and art, the Journal's Laura J. Nelson and Paul Kiernan report. Someone with $10 billion would owe $500 million. Backers expect about $100 billion from 200 to 300 people, with the money set aside for health care. A healthcare workers' union wrote it after a federal law set up cuts to Medicaid, which covers more than one-third of Californians.
The fight has been loud. Campaign money on the three related measures tops $300 million. About 90 cents of every dollar went to beating the tax. Gov. Gavin Newsom opposes it. The state's Democratic Party endorsed it. Unions split. Independent polls put support a little ahead of opposition, and a big share of voters hasn't decided. One detail matters for planning. The tax counts anyone who was a California resident on Jan. 1, 2026. Moving now is no easy way out. If it passes, that part is expected to end up in court.
Colorado's three questions
Colorado votes on Amendment 87. It would replace the state's 4.4% flat income tax with graduated rates. The top rate would be 8.4% on income over $1 million. Supporters say people earning $500,000 or less would still pay 4.4%. The Journal's editorial board opposes the measure. It argues the brackets aren't indexed to inflation, so more people would drift into higher rates over time. Two more measures sit beside it. Proposition NN lifts this year's $20.5 billion spending cap by $4.6 billion. Over ten years it would let the state hold on to as much as $37.5 billion it would otherwise have to refund. Proposition 136 would lock in a 4.4% cap on income tax rates. If both 136 and 87 pass, the one with more votes wins.
Our read
This is a tax question, and for almost everyone reading it isn't a direct bill. Most households don't own $1 billion. Most don't clear $500,000 a year. The planning lesson sits in the details. First, residency is proven with records. California's tax officials check phone logs and club memberships to test whether someone really moved. If you plan to change states in retirement, keep the paper trail from day one. Second, graduated rates bite hardest on one-time income. Selling a business, exercising options or taking a big IRA withdrawal could land a Colorado filer in the 8.4% bracket for one year. Spreading income across years is the oldest tool in the box. Third, a union sprinkler fitter in the story worried a wider version could someday reach ordinary workers' assets, including retirement savings. That's a worry for now. No such law is on either ballot. Meta (META) came up because its board arranged a share split to help cover a potential bill. It's held at weight in 20 books. Nothing added.
The one thing in your plan this touches is where you live and where you'll pay tax. The check this week is to look at any big one-time income you expect in the next two years and ask which state and which year it lands in. If the answer involves either of these states, talk it through before Nov. 3. You check the forecast before the trip. The trailhead is too late.