Every Californian deserves quality education, health care, well-paying jobs, and the resources to build a secure future — and sustained public investment is how we get there. Recent experience shows that such investments are possible with voter-approved, progressive reforms that strengthen and expand California’s revenue base.
In 2012, California voters asked the state’s highest earners — the top 2% of Californians — to contribute a little more and use that money to invest in the services California’s communities need.
Proposition 30, approved by voters in 2012, temporarily raised income tax rates on just the top 2% of Californians. Four years later, voters chose to keep those rates in place through 2030 by passing Prop. 55. These tax rates have generated significant state revenue, securing investments in education and other important services.
Since its initial enactment, this measure has generated more than $104 billion. In the last couple of years alone, the higher rates have generated around $9 to $10 billion per year. These revenues now represent a core component of the state budget, supporting school programs and other vital services.
key impact
The tax rate on the top 2% of Californians generates $9 to $10 billion per year, supporting investments in education, tax credits for Californians with low incomes, and strengthening the state’s finances.
What investments did the additional revenue secure?
California has used Prop 30/55 revenues to increase investments in education, increase access to health care, expand tax credits to Californians with low incomes, and strengthen state reserves, among other investments. The rate increases, along with a rising economy, made it possible for the state to increase education spending. During this period, the state implemented a major school finance reform and launched other initiatives such as the Universal Meals Program.
Beyond the classroom, the voter-approved tax on the state’s highest earners helped policymakers expand California’s Earned Income Tax Credit, improve access to health care through the Medi-Cal program, and establish new retirement saving options for private-sector employees.
Additionally, the additional revenues contributed to larger deposits into the state’s rainy day fund and payments to reduce state debts, moves that protected public services during times of economic downturns and lower-than-expected state revenues.
What’s next?
The top tax rates are set to expire in 2030, and voters will likely have an opportunity in November 2026 to renew this top tax rate to ensure the investments Californians make in schools, health care, and support for working families can continue.
