California’s Proposition 30 was a 2022 ballot initiative that would have added a 1.75% income tax surcharge on earnings above $2 million to fund zero-emission vehicle programs and wildfire response. Voters rejected it in November 2022, with roughly 57.6% voting no and 42.4% voting yes.1California Secretary of State. Official Declaration of the Vote Results on State Ballot Measures (November 8, 2022, General Election) No new tax took effect, and no funding accounts were created. The measure is still worth understanding because the problems it tried to solve are still here and similar proposals keep surfacing in California politics.
What the Tax Would Have Done
Prop 30 would have added 1.75% to the tax on the portion of a person’s income exceeding $2 million per year.2Legislative Analyst’s Office. Proposition 30 The surcharge applied only to the marginal income above that line. Someone earning $2.5 million would have owed the extra 1.75% on $500,000. Anyone earning under $2 million would have been unaffected.
California’s top marginal income tax rate is already 12.3%, plus a 1% mental health services surcharge on income over $1 million, for an effective top rate of 13.3%. Prop 30 would have pushed that top rate to roughly 15.05% on income above $2 million. The measure would have taken effect in January 2023 and included a sunset: the tax would have expired no later than January 2043, or earlier if California cut its greenhouse gas emissions to at least 80% below 1990 levels for three consecutive years. The Legislative Analyst’s Office estimated the surcharge would have generated several billion dollars a year.2Legislative Analyst’s Office. Proposition 30
Where the Money Would Have Gone
Revenue would have flowed into three dedicated accounts, separate from the General Fund, with the split written into the ballot language so the legislature couldn’t reassign it:
- Zero-Emission Vehicle Equity Account, 45%: subsidies to make electric and hydrogen fuel-cell vehicles more affordable, focused on lower-income buyers.
- ZEV Infrastructure Investment Account, 35%: public charging stations and hydrogen fueling infrastructure statewide, especially in underserved communities and along major travel corridors.
- Wildfire Response and Resistance Account, 20%: hiring and training firefighters and improving forest management.
Why It Lost
The most prominent opponent was Governor Gavin Newsom, a Democrat who generally supports aggressive climate policy. Newsom called Prop 30 “one company’s cynical scheme to grab a huge taxpayer subsidy,” pointing to Lyft, the ride-hailing company, as one of the initiative’s primary financial backers. California regulations require ride-hailing companies to transition their fleets to zero-emission vehicles, and a large subsidy program funded by someone else’s taxes would have lowered Lyft’s compliance costs.
That argument stuck. Even voters sympathetic to climate policy balked at a gig-economy corporation pushing a tax increase on wealthy individuals to fund a program that would partly benefit its own bottom line. The California Teachers Association also opposed the measure, concerned that dedicating billions in income tax revenue to vehicle subsidies would narrow the legislature’s flexibility to fund schools. Combined with general fatigue over California’s already-high income tax rates, those forces proved insurmountable.
What the Defeat Changed for California EV Policy
The vote didn’t slow California’s shift toward zero-emission vehicles; it just means the transition is happening through regulation rather than tax-funded subsidies. The Advanced Clean Cars II rule, adopted by the California Air Resources Board, requires that 100% of new cars and light trucks sold in the state be zero-emission by 2035. The phase-in starts at 35% for model year 2026, rises to 68% by 2030, and reaches full implementation in 2035.3California Air Resources Board. California Moves to Accelerate to 100% New Zero-Emission Vehicle Sales by 2035
Incentives, though, are thinner than Prop 30 proposed. California’s Clean Vehicle Rebate Project, which had provided rebates of up to $7,000 for new ZEV purchases, closed permanently on November 8, 2023.4California Air Resources Board. Clean Vehicle Rebate Project The Clean Cars 4 All program still operates in several air districts, but it’s limited to lower-income households scrapping older gas vehicles rather than a broad consumer rebate. Governor Newsom proposed a $200 million ZEV incentive program in early 2026 offering point-of-sale discounts with automaker matching funds, though its funding still depends on legislative approval.
Federal EV Credits for California Buyers in 2026
At the federal level, the New Clean Vehicle Credit (Section 30D), the Previously-Owned Clean Vehicle Credit (Section 25E), and the Qualified Commercial Clean Vehicle Credit all became unavailable for vehicles acquired after September 30, 2025.5Internal Revenue Service. Clean Vehicle Tax Credits If you bought or entered a binding contract for an EV on or before that date, you can still claim the credit on your 2025 or 2026 return, even if delivery came later. For anyone acquiring a vehicle after the cutoff, the credits no longer apply.
The Alternative Fuel Vehicle Refueling Property Tax Credit does extend further, covering installation of home EV charging equipment placed in service before July 1, 2026.5Internal Revenue Service. Clean Vehicle Tax Credits That credit won’t help with the vehicle itself, but it can offset the cost of installing a Level 2 home charger, which typically runs $1,000 to $2,500.
The Bottom Line
For high-income Californians, Prop 30’s defeat means the top effective state income tax rate stays at 13.3% instead of climbing to roughly 15%. For everyone else, the practical takeaway is that the regulatory push toward ZEVs is accelerating regardless, but the financial cushion Prop 30 would have provided for buyers, infrastructure, and wildfire work doesn’t exist. The state now relies on annual budget appropriations that compete with education, healthcare, and every other priority, and when budgets tighten, discretionary climate spending is often among the first items trimmed.