Technologies

Three November Ballot Measures Targeting High-Income Earners

Voters in California, Colorado, and Washington will decide on November ballot measures that could reshape tax burdens for high earners, highlighting a growing divide between states raising taxes on the wealthy and those cutting them.

A version of this article appeared in Verum’s Inside Wealth newsletter, a weekly guide to the high-net-worth investor and consumer. Sign up to receive future editions, straight to your inbox.

The K-shaped economy has stirred a rise in populism and calls for the wealthy to pay their “fair share,” especially in Democratic-led states. At the same time, rising competition among states to attract high earners is leading to ballot initiatives to cap or even lower taxes.

“Over the last few years, we’ve seen a divergence in state income taxes and taxes on high earners,” said Jared Walczak of the Tax Foundation. “We’ve seen many states cut individual taxes and others going in the opposite direction. It used to be the average tax rate was 6%. Now that middle has been hollowed out.”

The votes add fuel to the national debate over taxing the wealthy. In Massachusetts, a millionaire tax passed in 2022, imposing an extra 4% levy on those making more than $1 million a year.

The tax has raised far more revenue than predicted, generating over $3 billion in the 2025-2026 fiscal year. Yet a study of IRS data by the Boston-based Pioneer Institute found that Massachusetts lost over $4 billion in adjusted gross income in 2023 from high earners leaving the state.

Rhode Island joined the “millionaire tax” club this summer, passing legislation that added a phased, 3% surcharge to $1 million-plus earners, creating a top rate of 8.99% by 2029.

New York’s tax on high-end second homes faced new legal challenges this week, as a state judge ruled that the city needs to re-do notifications to potential taxpayers and businessmen Wilbur Ross and Steve Wynn filed suit against the tax claiming it’s unconstitutional.

At the other end of the political spectrum, more than a dozen states are in the process of reducing or eliminating their income taxes over time. South Carolina, Arkansas, West Virginia, Georgia, Indiana, Kentucky, and Utah passed income tax reductions this year, with others approving revenue triggers that lower rates based on state revenue.

In November, voters will head to the polls to decide on ballot measures that could significantly affect high earners and wealth migration. Three states to watch:

California

California’s Billionaire Tax Act has divided Democrats, split Silicon Valley and driven several of the state’s billionaires to move to Florida. The measure would impose a one-time tax of 5% on the total net worth of California residents worth $1 billion or more. Since it needs only a simple majority of voters to pass, and would tax about 200 of the state’s richest residents, many experts predicted it would pass.

Yet a recent University of California, Berkeley poll shows 45% in favor and 43% opposed. Two competing ballot measures are likely to sow confusion and possibly defeat the billionaires tax if they receive more votes.

California’s billionaires are fighting back. Sergey Brin, John Doerr, Patrick Collison, Michael Moritz, Eric Schmidt, Max Levchin and others have contributed a total of more than $180 million to groups opposing the tax. Tax advisers are also counseling the state’s billionaires on strategies to lower their taxable net worth, such as investing in Treasuries or transferring real estate to personal ownership.

Colorado

Voters will decide whether to replace Colorado’s flat tax of 4.4% with a graduated income tax that raises the rates for high earners. The tax would increase to 7.4% for those making more than $500,000 a year and to 8.4% for income over $1 million.

The income thresholds apply to both single filers and joint filers. So a couple making more than $500,000 a year combined would be subject to the 7.4% rate on income above the threshold. Analysts estimate the higher rates would impact the top 3% of taxpayers.

Individuals or couples making less than $100,000 a year would get a tax cut, with a rate as low as 3.7% depending on income.

The changes are projected to raise about $2.7 billion a year for education, healthcare and other public services. Opponents of the measure, including the state’s Democratic Governor, Jared Polis, and the Colorado Chamber of Commerce, argue it will reduce the state’s competitiveness and drive businesses to other states.

Americans for Tax Reform, the conservative advocacy group, said the new tax would hurt businesses, since it also applies to pass-throughs.

“Colorado’s flat tax has provided taxpayers and businesses with a simple and predictable tax system,” the group said. “The ballot measure would replace it with a system that penalizes greater income, investment and success.”

Washington State

Before this year, Washington was one of nine states with no personal income tax. The low-tax environment helped attract tech giants like Microsoft and Amazon as well as large outposts for Apple, Alphabet and Meta.

In March, the state passed a millionaire’s tax, imposing a 9.9% tax on household income over $1 million. The tax is scheduled to take effect in 2028, with collections starting in 2029. It’s projected to raise up to $4 billion from about 25,000 taxpayers.

Next month, voters will get a chance to kill the tax before it even takes effect. The ballot measure called Initiative 645 would repeal the millionaire’s tax and prohibit future state and local taxes on income.

Supporters of the measure say the millionaire’s tax is a pretext to tax all Washingtonians and they want to protect small businesses and working families. Opponents say the tax is needed to fund education, healthcare and other services.

The controversial wording of the Initiative could swing the vote. The ballot initiative includes language that the measure would “decrease funding” for public K-12 schools, universities and healthcare. A recent poll showed that when the budget language was included, a majority of those polled said they would vote “no.”

Technologies

Cerebras Shares Rise 6% Following Sam Altman’s Endorsement as Key Partner

Cerebras shares rose 6% after OpenAI CEO Sam Altman reaffirmed the company’s status as a key partner, helping the stock recover from last week’s decline.

Cerebras shares increased during premarket trading on Monday, recovering from last week’s decline, after OpenAI CEO Sam Altman confirmed to investors that the company is a “close partner.”

The AI hardware company, which launched on the Nasdaq in a major initial public offering in May, experienced a 20% stock drop to its lowest point last week when it was disclosed that OpenAI would use Nvidia’s graphics processing units for its “Ultrafast” GPT-6.1 Sol mode instead of Cerebras’ chips.

“There is some speculation about our partnership with Cerebras,” Altman posted on X on Friday. “Cerebras is a close partner, and we have a deep engagement pushing the boundaries of speed.”

Following Altman’s remarks, the company’s stock rose approximately 3% during extended trading on Friday.

The stock was last up 6.3% in premarket trading at $177 per share, nearly half of its post-IPO peak. The company’s market capitalization currently stands at just over $39 billion, down from $95 billion at its May debut.

Cerebras, a competitor to Nvidia, sells large computer chips and AI systems designed to run AI models faster than traditional GPUs. The company claims its flagship product, the Wafer Scale Engine 3, operates faster than Nvidia’s GPU.

Cerebras entered a $10 billion agreement with OpenAI in January to provide 750 megawatts of computing power through 2028.

Citi analysts stated that their outlook for Cerebras’ revenue between 2026 and 2028 remains “unchanged.”

“We believe frontier-AI labs’ latest models would initially deploy on internal chips before running on third-party or Cerebras cloud, so it’s too early to read much into it,” they noted in a Friday morning report.

“We believe the stock’s ability to outperform is increasingly linked to evidence that gross margins are stabilizing. Any further delay in reaching the gross margin bottom would likely impact sentiment, especially given Cerebras’ premium valuation,” they added.

Technologies

China shuts hundreds of banks as Beijing moves to shore up its financial system

Beijing shuttered 670 mainly rural banks last year in a bid to create fewer, larger and better-capitalized lenders.

China is accelerating its consolidation of smaller, mostly rural banks in a bid to shore up its financial system, amid ongoing concerns over an economic slowdown in the country.

Beijing’s policy-led consolidation saw a record 670 lenders closed in 2025 — about one-quarter of banks in the country — as authorities ramped up mergers and dissolutions to create fewer, larger and better-capitalized institutions, according to Fitch Ratings analysis.

Small and rural commercial banks “remain the weakest part of the system” in China, Fitch said in a report, which flagged their “poor asset quality, low capitalization and governance shortcomings,” especially in less-developed regions of the country.

The rating agency said the return on assets among rural banks fell to 0.45% in the first half, down from 0.56% in 2021. Meanwhile, non-performing loans among such lenders rose to 2.8% in the same period, ahead of the sector average of 1.5%, with greater exposure to smaller companies, property developers and local government funding vehicles.

The consolidation push is aimed at boosting oversight, curbing regulatory arbitrage and improving transparency, Fitch said, noting that stress at smaller lenders is unlikely to lead to system-wide contagion, pointing to their largely localized operations and limited interbank exposure.

The measures could “ultimately reshape competitive dynamics among smaller lenders, although their structural weaknesses may persist in the near term,” the rating agency added.

The move comes amid ongoing signs of strain in the world’s second-largest economy.

China’s GDP grew 4.3% in the second quarter, its slowest pace since 2022, while industrial profits came in at 4.2% annually in August, their weakest pace this year.

Technologies

The 2029 tipping point: Western populations are about to start shrinking, piling pressure on public finances

Moody’s predicts that the world’s aging populations will have fundamental impacts on the global economy and lead to difficult policy decisions.

As Western populations age, fewer workers and higher costs will strain public finances, credit rating agency Moody’s has warned.

Europe is at the sharp end of the demographic shift. The European Union’s population is projected to peak as soon as 2029, “after which a sustained long-term decline will begin,” according to the European Commission.

The U.S. Census Bureau does not expect the American population to peak until 2080 under its main projection, or until 2043 under its low-immigration scenario. Excluding immigration impact, the population decline has already started.

But Moody’s says the fiscal pressures from aging emerge long before populations actually start shrinking.

Today, G7 economies have about three working-age people for every person over 65. That ratio is expected to fall to around two by 2050, putting further pressure on growth and public finances, including healthcare systems, according to Moody’s.

Aging populations affect economies through slower economic growth, greater pressure on public finances from pension and care costs, changing consumer demand, and shifts in real interest rates and sovereign yields, Olivier Chemla, vice president of credit strategy and standards at Moody’s, told CNBC’s “Squawk Box Europe” on Friday.

In a report published last week, Moody’s forecasts that the world’s aging populations will have fundamental impacts on the global economy and lead to difficult policy decisions.

While population growth has long been a tailwind for growth and creditworthiness, falling fertility rates and unprecedented speed of changing age structures are now changing that picture, Moody’s writes.

“Fewer workers will limit productive capacity, while fewer households and consumers will weaken demand. As a result, countries will have to rely more on productivity to sustain growth,” the report states.

The AI impact

AI and increased productivity can only partially offset the long-term challenge of an aging workforce, Chemla said.

“This is a partial mitigant because you can certainly replace and enhance the supply side of the economy in factories and in services, but at the same time, robots do not consume – at least not yet – and so on the demand side, you will still be having that gap, which will slow growth,” he added.

And it’s not only Europe and the U.S., but emerging economies are aging rapidly, too. China’s share of people aged 65 and over has doubled from 7% to 14% over the past two decades, with Brazil, Thailand and Turkiye on similar trajectories.

These countries will face the costs of aging at much lower income levels than the advanced economies that aged before them, the report says, noting that in Europe, the same shift took several decades.