Across the midterm contests, Republicans faced a sweeping defeat. While voters rejected GOP candidates in large numbers, they did not completely repudiate tax agendas long associated with the party. Even as several ballot measures increased taxes, a number of initiatives aligned with tax-cut principles still advanced. Below are notable outcomes from Election Day.

Low-Tax Wins

1. North Carolina

Residents of North Carolina endorsed changes to the state constitution that would cap personal and corporate income taxes at 3.5 percent. The measure passed with about 61.2 percent support. It does not immediately alter current tax rates, but it creates a strong barrier against future tax increases. With this reform, the 2027 personal income tax rate is projected to drop to 3.49 percent, falling below the new cap. In parallel, the corporate income tax rate remains at 2 percent, and a 2021 law aimed at eliminating the tax by 2030 remains on track.

Voters in the Tar Heel State also approved a constitutional amendment directing the Legislature to set limits on how much local governments can raise property taxes. However, unlike the income tax provision, this amendment does not spell out exact limits. Instead, it empowers lawmakers to decide how strict those limits should be and whether exemptions should apply. Given that property taxes constitute more than one-third of local government funding in North Carolina, drastic reductions are unlikely. Nonetheless, the votes signal broad statewide support for easing the tax burden.

2. Iowa

Iowa voters approved a constitutional amendment that requires a two-thirds majority in both chambers of the Legislature to raise corporate or personal income taxes. Amendment 1 passed with 56.2 percent of the vote, continuing a trend of income tax reductions in the state. In 2025, Iowa adopted a flat personal income tax rate of 3.8 percent. Free-market think tanks lauded the reform, with the Buckeye Institute asserting that Iowa’s economy is becoming more competitive thanks to the flat tax.

Although Amendment 1 does not reduce taxes directly, it makes it more difficult for future legislatures to undo the recent low-tax reforms.

3. Florida

Florida joined a small cadre of states approving property tax reforms, delivering policy changes that were among the most consequential. Amendment 3 won with 62 percent support, boosting the exemption on primary residences to $250,000 and lowering the cap on annual increases in assessed values for non-primary residences from 10 percent to 5 percent.

While this outcome signals popular backing for tax relief, reducing property taxes can pose analytical challenges for libertarians. Property taxes are often viewed as the least distortionary tax, so evaluating the merits of a tax cut depends on how local governments compensate for the lost revenue and how the measure is designed, notes scholars in the libertarian-leaning commentary space.

One analyst warned that if local officials respond by raising sales taxes or seeking more state aid, the net effect could be a government of the same size with more inefficient tax structures and a shift toward fiscal centralization, which would not be ideal.

4. California

California voters examined Proposition 42, a constitutional measure aimed at barring new state taxes on personal property—including stocks, business interests, and retirement savings—and barring certain retroactive taxes. The proposal found particular favor outside urban centers.

It was presented as a counterweight to Proposition 40, which would impose a one-time 5 percent tax on billionaire wealth (as of publication, Proposition 40 remained too close to call). Yet Proposition 42’s reach extends well beyond billionaire fortunes: it would shield anyone with funds held in savings, retirement, or investment accounts.

Low-Tax Losses

1. Washington

Washington voters rejected Initiative 645, which sought to repeal the new 9.9 percent income tax on earnings above $1 million and to bar future personal income taxes at the state or local level. The measure lost with about 58.12 percent opposed, meaning the millionaire tax will take effect in 2028.

Opponents argued the tax would likely be extended to non-millionaires as well, casting doubt on assurances that it would apply only to a narrow group. A prominent advocate for the measure warned at a rally that many residents did not believe the assurances that the tax would not reach them.

Nevertheless, concerns about potential cuts to public spending eventually outweighed the tax objection for many voters. Activists contended that repealing the tax would reduce funding for K-12 schools, higher education, and healthcare.

2. Oklahoma

Oklahoma voters rejected State Question 847, a constitutional amendment that would have tightened the annual cap on increases to property valuations used in calculating property taxes. The measure failed by about 54.3 percent to 45.7 percent, thereby leaving current limits in place.

3. Wyoming

Wyoming voters turned down Initiative 1, which would have cut certain residential property taxes by half. The proposal attracted more than 30,000 signatures but was rejected by 55.1 percent of voters.

Concerns about potential reductions to essential services helped drive the defeat. The chair of the No on Prop 1 coalition argued that people wanted to ensure funding for critical services such as public schools, emergency responders, road maintenance, and libraries remains available to Wyoming families.

Wyoming had already enacted substantial property tax relief—most notably a 2025 measure giving a 25 percent exemption on the first $1 million of a primary residence’s market value—so some voters may have viewed another cut as unnecessary.

Although voters ousted Republican candidates, it remains unclear whether they embraced Democratic policy programs. A Tax Foundation analyst noted that, despite partisan shifts, voters’ preferences on tax policy have stayed relatively stable: they punished Republicans in the polls, but their general stance on taxation aligns with historical patterns seen in earlier elections.