Encode the 2030 expiry of California's top income tax rates; add Prop 3 (2026) reform

changelog.d/ca-prop3-2030-expiry.added.md

@@ -0,0 +1 @@
+Add California Proposition 3 (2026) as a contributed reform, toggled by gov.contrib.states.ca.prop3.in_effect, that keeps the rates above 9.3% from 2031 onward.

changelog.d/ca-prop3-2030-expiry.fixed.md

@@ -0,0 +1 @@
+Encode the expiry of California's 10.3%, 11.3% and 12.3% income tax rates after tax year 2030 in all five filing-status schedules (Cal. Const. art. XIII, § 36(f)(2)-(3)).

policyengine_us/parameters/gov/contrib/states/ca/prop3/in_effect.yaml

@@ -0,0 +1,16 @@
+description: California applies the Proposition 3 (2026) permanent extension of the income tax rates above 9.3% in years from 2031 onward in which this is true.
+values:
+  0000-01-01: false
+metadata:
+  unit: bool
+  period: year
+  label: California Proposition 3 (2026) in effect
+  reference:
+    - title: California Proposition 3 (2026), Official Voter Information Guide, Legislative Analyst's analysis, Figure 1
+      href: https://vig.cdn.sos.ca.gov/2026/general/pdf/prop3.pdf#page=2
+    - title: California Proposition 3 (2026), Text of Proposed Law, SEC. 4, amending Cal. Const. art. XIII, § 36(f)(2) (strikes "and before January 1, 2031,")
+      href: https://vig.cdn.sos.ca.gov/2026/general/pdf/prop3-text-proposed-laws.pdf#page=6
+    - title: California Proposition 3 (2026), Text of Proposed Law, SEC. 4, amending Cal. Const. art. XIII, § 36(f)(2)(D), (f)(3) and (f)(3)(D)
+      href: https://vig.cdn.sos.ca.gov/2026/general/pdf/prop3-text-proposed-laws.pdf#page=7
+    - title: Cal. Const. art. XIII, § 36(f)(2)-(3)
+      href: https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CONS&sectionNum=SEC.%2036.&article=XIII

policyengine_us/parameters/gov/states/ca/tax/income/rates/head_of_household.yaml

@@ -70,6 +70,9 @@ brackets:
         uprating: gov.states.ca.cpi
     rate:
       2021-01-01: 0.103
+      # Proposition 3 (November 3, 2026 ballot) would repeal this 2031 reversion here and in
+      # the next two brackets; check the certified result and remove these entries if it passes.
+      2031-01-01: 0.093
   - threshold:
       values:
         2021-01-01: 510_303
@@ -81,6 +84,7 @@ brackets:
         uprating: gov.states.ca.cpi
     rate:
       2021-01-01: 0.113
+      2031-01-01: 0.093
   - threshold:
       values:
         2021-01-01: 850_503
@@ -92,6 +96,7 @@ brackets:
         uprating: gov.states.ca.cpi
     rate:
       2021-01-01: 0.123
+      2031-01-01: 0.093
 
 metadata:
   threshold_unit: currency_USD
@@ -110,6 +115,9 @@ metadata:
       href: https://www.ftb.ca.gov/forms/2024/2024-540-tax-rate-schedules.pdf
     - title: California Income Tax Rate Schedules for 2025
       href: https://www.ftb.ca.gov/forms/2025/2025-540-tax-rate-schedules.pdf
-    - title: Cal. Rev. & Tax. Code § 17041
+    - title: Cal. Const. art. XIII, § 36(f)(3) (rates above 9.3% apply to taxable years before January 1, 2031)
+      href: https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CONS&sectionNum=SEC.%2036.&article=XIII
+    - title: Proposition 55 (2016), Text of Proposed Law, SEC. 4, amending Cal. Const. art. XIII, § 36(f)(3) to end the rates above 9.3% before January 1, 2031
+      href: https://vig.cdn.sos.ca.gov/2016/general/en/pdf/text-proposed-laws.pdf#page=16
+    - title: Cal. Rev. & Tax. Code § 17041(c)(1), (h)
       href: https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=17041.&lawCode=RTC
-      # Index according to federal tax parameter rules until we add California CPI trend.

policyengine_us/parameters/gov/states/ca/tax/income/rates/joint.yaml

@@ -70,6 +70,9 @@ brackets:
         uprating: gov.states.ca.cpi
     rate:
       2021-01-01: 0.103
+      # Proposition 3 (November 3, 2026 ballot) would repeal this 2031 reversion here and in
+      # the next two brackets; check the certified result and remove these entries if it passes.
+      2031-01-01: 0.093
   - threshold:
       values:
         2021-01-01: 750_442
@@ -81,6 +84,7 @@ brackets:
         uprating: gov.states.ca.cpi
     rate:
       2021-01-01: 0.113
+      2031-01-01: 0.093
   - threshold:
       values:
         2021-01-01: 1_250_738
@@ -92,6 +96,7 @@ brackets:
         uprating: gov.states.ca.cpi
     rate:
       2021-01-01: 0.123
+      2031-01-01: 0.093
 
 metadata:
   threshold_unit: currency_USD
@@ -110,6 +115,11 @@ metadata:
       href: https://www.ftb.ca.gov/forms/2024/2024-540-tax-rate-schedules.pdf
     - title: California Income Tax Rate Schedules for 2025
       href: https://www.ftb.ca.gov/forms/2025/2025-540-tax-rate-schedules.pdf
-    - title: Cal. Rev. & Tax. Code § 17041
+    - title: Cal. Const. art. XIII, § 36(f)(2) (rates above 9.3% apply to taxable years before January 1, 2031)
+      href: https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CONS&sectionNum=SEC.%2036.&article=XIII
+    - title: Proposition 55 (2016), Text of Proposed Law, SEC. 4, amending Cal. Const. art. XIII, § 36(f)(2) to end the rates above 9.3% before January 1, 2031
+      href: https://vig.cdn.sos.ca.gov/2016/general/en/pdf/text-proposed-laws.pdf#page=16
+    - title: Cal. Rev. & Tax. Code § 17041(a)(1), (h)
       href: https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=17041.&lawCode=RTC
-      # Index according to federal tax parameter rules until we add California CPI trend.
+    - title: Cal. Rev. & Tax. Code § 17045 (joint and surviving spouse tax is twice the tax on one-half of taxable income)
+      href: https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=17045.&lawCode=RTC

policyengine_us/parameters/gov/states/ca/tax/income/rates/separate.yaml

@@ -70,6 +70,9 @@ brackets:
         uprating: gov.states.ca.cpi
     rate:
       2021-01-01: 0.103
+      # Proposition 3 (November 3, 2026 ballot) would repeal this 2031 reversion here and in
+      # the next two brackets; check the certified result and remove these entries if it passes.
+      2031-01-01: 0.093
   - threshold:
       values:
         2021-01-01: 375_221
@@ -81,6 +84,7 @@ brackets:
         uprating: gov.states.ca.cpi
     rate:
       2021-01-01: 0.113
+      2031-01-01: 0.093
   - threshold:
       values:
         2021-01-01: 625_369
@@ -92,6 +96,7 @@ brackets:
         uprating: gov.states.ca.cpi
     rate:
       2021-01-01: 0.123
+      2031-01-01: 0.093
 
 metadata:
   threshold_unit: currency_USD
@@ -110,6 +115,9 @@ metadata:
       href: https://www.ftb.ca.gov/forms/2024/2024-540-tax-rate-schedules.pdf
     - title: California Income Tax Rate Schedules for 2025
       href: https://www.ftb.ca.gov/forms/2025/2025-540-tax-rate-schedules.pdf
-    - title: Cal. Rev. & Tax. Code § 17041
+    - title: Cal. Const. art. XIII, § 36(f)(2) (rates above 9.3% apply to taxable years before January 1, 2031)
+      href: https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CONS&sectionNum=SEC.%2036.&article=XIII
+    - title: Proposition 55 (2016), Text of Proposed Law, SEC. 4, amending Cal. Const. art. XIII, § 36(f)(2) to end the rates above 9.3% before January 1, 2031
+      href: https://vig.cdn.sos.ca.gov/2016/general/en/pdf/text-proposed-laws.pdf#page=16
+    - title: Cal. Rev. & Tax. Code § 17041(a)(1), (h)
       href: https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=17041.&lawCode=RTC
-      # Index according to federal tax parameter rules until we add California CPI trend.

policyengine_us/parameters/gov/states/ca/tax/income/rates/single.yaml

@@ -70,6 +70,9 @@ brackets:
         uprating: gov.states.ca.cpi
     rate:
       2021-01-01: 0.103
+      # Proposition 3 (November 3, 2026 ballot) would repeal this 2031 reversion here and in
+      # the next two brackets; check the certified result and remove these entries if it passes.
+      2031-01-01: 0.093
   - threshold:
       values:
         2021-01-01: 375_221
@@ -81,6 +84,7 @@ brackets:
         uprating: gov.states.ca.cpi
     rate:
       2021-01-01: 0.113
+      2031-01-01: 0.093
   - threshold:
       values:
         2021-01-01: 625_369
@@ -92,6 +96,7 @@ brackets:
         uprating: gov.states.ca.cpi
     rate:
       2021-01-01: 0.123
+      2031-01-01: 0.093
 
 metadata:
   threshold_unit: currency_USD
@@ -110,6 +115,9 @@ metadata:
       href: https://www.ftb.ca.gov/forms/2024/2024-540-tax-rate-schedules.pdf
     - title: California Income Tax Rate Schedules for 2025
       href: https://www.ftb.ca.gov/forms/2025/2025-540-tax-rate-schedules.pdf
-    - title: Cal. Rev. & Tax. Code § 17041
+    - title: Cal. Const. art. XIII, § 36(f)(2) (rates above 9.3% apply to taxable years before January 1, 2031)
+      href: https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CONS&sectionNum=SEC.%2036.&article=XIII
+    - title: Proposition 55 (2016), Text of Proposed Law, SEC. 4, amending Cal. Const. art. XIII, § 36(f)(2) to end the rates above 9.3% before January 1, 2031
+      href: https://vig.cdn.sos.ca.gov/2016/general/en/pdf/text-proposed-laws.pdf#page=16
+    - title: Cal. Rev. & Tax. Code § 17041(a)(1), (h)
       href: https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=17041.&lawCode=RTC
-      # Index according to federal tax parameter rules until we add California CPI trend.

policyengine_us/parameters/gov/states/ca/tax/income/rates/surviving_spouse.yaml

@@ -70,6 +70,9 @@ brackets:
         uprating: gov.states.ca.cpi
     rate:
       2021-01-01: 0.103
+      # Proposition 3 (November 3, 2026 ballot) would repeal this 2031 reversion here and in
+      # the next two brackets; check the certified result and remove these entries if it passes.
+      2031-01-01: 0.093
   - threshold:
       values:
         2021-01-01: 750_442
@@ -81,6 +84,7 @@ brackets:
         uprating: gov.states.ca.cpi
     rate:
       2021-01-01: 0.113
+      2031-01-01: 0.093
   - threshold:
       values:
         2021-01-01: 1_250_738
@@ -92,6 +96,7 @@ brackets:
         uprating: gov.states.ca.cpi
     rate:
       2021-01-01: 0.123
+      2031-01-01: 0.093
 
 metadata:
   threshold_unit: currency_USD
@@ -110,6 +115,11 @@ metadata:
       href: https://www.ftb.ca.gov/forms/2024/2024-540-tax-rate-schedules.pdf
     - title: California Income Tax Rate Schedules for 2025
       href: https://www.ftb.ca.gov/forms/2025/2025-540-tax-rate-schedules.pdf
-    - title: Cal. Rev. & Tax. Code § 17041
+    - title: Cal. Const. art. XIII, § 36(f)(2) (rates above 9.3% apply to taxable years before January 1, 2031)
+      href: https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CONS&sectionNum=SEC.%2036.&article=XIII
+    - title: Proposition 55 (2016), Text of Proposed Law, SEC. 4, amending Cal. Const. art. XIII, § 36(f)(2) to end the rates above 9.3% before January 1, 2031
+      href: https://vig.cdn.sos.ca.gov/2016/general/en/pdf/text-proposed-laws.pdf#page=16
+    - title: Cal. Rev. & Tax. Code § 17041(a)(1), (h)
       href: https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=17041.&lawCode=RTC
-      # Index according to federal tax parameter rules until we add California CPI trend.
+    - title: Cal. Rev. & Tax. Code § 17045 (joint and surviving spouse tax is twice the tax on one-half of taxable income)
+      href: https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=17045.&lawCode=RTC

policyengine_us/reforms/reforms.py

@@ -290,6 +290,9 @@
 from .states.ca.ab2591 import (
     create_ca_ab2591_reform,
 )
+from .states.ca.prop3 import (
+    create_ca_prop3_reform,
+)
 from .states.ga.sb520 import (
     create_ga_sb520_reform,
 )
@@ -562,6 +565,7 @@ def create_structural_reforms_from_parameters(parameters, period):
         parameters, period
     )
     ca_ab2591 = create_ca_ab2591_reform(parameters, period)
+    ca_prop3 = create_ca_prop3_reform(parameters, period)
     ga_sb520 = create_ga_sb520_reform(parameters, period)
     hi_hb2306_cdcc = create_hi_hb2306_cdcc_reform(parameters, period)
     nc_eitc = create_nc_eitc_reform(parameters, period)
@@ -712,6 +716,7 @@ def create_structural_reforms_from_parameters(parameters, period):
         tx_rebate,
         al_hb527_overtime_deduction,
         ca_ab2591,
+        ca_prop3,
         ga_sb520,
         hi_hb2306_cdcc,
         nc_eitc,

policyengine_us/reforms/states/ca/__init__.py

@@ -1 +1,2 @@
 from .ab2591 import create_ca_ab2591_reform
+from .prop3 import create_ca_prop3_reform

policyengine_us/reforms/states/ca/prop3/__init__.py

@@ -0,0 +1,5 @@
+from .ca_prop3_reform import (
+    create_ca_prop3,
+    create_ca_prop3_reform,
+    ca_prop3,
+)

policyengine_us/reforms/states/ca/prop3/ca_prop3_reform.py

@@ -0,0 +1,134 @@
+import functools
+
+from policyengine_us.model_api import *
+from policyengine_core.parameters import load_parameter_file
+from policyengine_core.periods import instant
+
+# Cal. Const. art. XIII, § 36(f)(2) (single, separate, and through RTC § 17045
+# joint and surviving spouse) and § 36(f)(3) (head of household) apply the
+# rates above 9.3% to taxable years before January 1, 2031. Proposition 3
+# (2026), SEC. 4, strikes that end date, so the rates in effect for 2030 keep
+# applying from 2031 onward.
+LAST_PRE_SUNSET_YEAR = instant("2030-01-01")
+SUNSET = instant("2031-01-01")
+HORIZON_END = instant("2100-12-31")
+FILING_STATUSES = [
+    "single",
+    "joint",
+    "separate",
+    "surviving_spouse",
+    "head_of_household",
+]
+
+
+def _active_windows(in_effect) -> list:
+    """Return the (start, stop) instants within SUNSET..HORIZON_END where the
+    dated values of ``in_effect`` are true.
+
+    ``values_list`` holds the user's dated overrides in reverse chronological
+    order; each value applies from its instant until the next later one.
+    """
+    windows = []
+    later_start = None
+    for value_at_instant in in_effect.values_list:
+        start = instant(value_at_instant.instant_str)
+        if value_at_instant.value:
+            window_start = max(start, SUNSET)
+            window_stop = HORIZON_END
+            if later_start is not None:
+                window_stop = min(later_start.offset(-1, "day"), HORIZON_END)
+            if window_start <= window_stop:
+                windows.append((window_start, window_stop))
+        later_start = start
+    return sorted(windows)
+
+
+@functools.lru_cache(maxsize=None)
+def _enacted_schedule(file_path: str):
+    # The schedule as enacted, read from the file the rates were loaded from,
+    # so the reform can tell the statutory sunset apart from a user's edit.
+    # The YAML must remain readable at this path, including after unpickling
+    # the system on another machine.
+    return load_parameter_file(file_path)
+
+
+def _constant_intervals(start, stop, *parameters) -> list:
+    """Split start..stop into the (start, stop) intervals on which every
+    parameter keeps one value."""
+    cuts = {start}
+    for parameter in parameters:
+        for value_at_instant in parameter.values_list:
+            cut = instant(value_at_instant.instant_str)
+            if start < cut <= stop:
+                cuts.add(cut)
+    cuts = sorted(cuts)
+    stops = [cut.offset(-1, "day") for cut in cuts[1:]] + [stop]
+    return list(zip(cuts, stops))
+
+
+def _restore_pre_sunset_rates(rates, enacted_rates: dict, windows: list) -> None:
+    """Within each window, give each bracket whose enacted rate the sunset
+    changes its 2030 rate, wherever the enacted post-sunset rate applies.
+
+    ``enacted_rates`` maps each filing status to its enacted schedule. Brackets
+    the sunset leaves unchanged keep any edit, including one bounded to 2030,
+    and so do intervals whose rate differs from the enacted rate, which a user
+    has set explicitly. Restored intervals no longer match the enacted rate, so
+    applying the reform again changes nothing.
+    """
+    updates = []
+    for status in FILING_STATUSES:
+        brackets = getattr(rates, status).brackets
+        for bracket, enacted_bracket in zip(brackets, enacted_rates[status].brackets):
+            rate = bracket.rate
+            enacted_rate = enacted_bracket.rate
+            if enacted_rate(SUNSET) == enacted_rate(LAST_PRE_SUNSET_YEAR):
+                continue
+            # The 2030 rate, including any rate the user set for 2030.
+            pre_sunset_rate = rate(LAST_PRE_SUNSET_YEAR)
+            for window_start, window_stop in windows:
+                for start, stop in _constant_intervals(
+                    window_start, window_stop, rate, enacted_rate
+                ):
+                    if rate(start) == enacted_rate(start):
+                        updates.append((rate, start, stop, pre_sunset_rate))
+    # Read every rate before writing any.
+    for rate, start, stop, value in updates:
+        rate.update(start=start, stop=stop, value=value)
+
+
+def create_ca_prop3(respect_in_effect: bool = False) -> Reform:
+    def modify_parameters(parameters):
+        if respect_in_effect:
+            windows = _active_windows(parameters.gov.contrib.states.ca.prop3.in_effect)
+        else:
+            windows = [(SUNSET, HORIZON_END)]
+        rates = parameters.gov.states.ca.tax.income.rates
+        enacted_rates = {
+            status: _enacted_schedule(getattr(rates, status).file_path)
+            for status in FILING_STATUSES
+        }
+        _restore_pre_sunset_rates(rates, enacted_rates, windows)
+        return parameters
+
+    class reform(Reform):
+        def apply(self):
+            self.modify_parameters(modify_parameters)
+
+    return reform
+
+
+def create_ca_prop3_reform(parameters, period, bypass: bool = False):
+    # The bypass instance, used by YAML `reforms:` tests, restores the rates
+    # for 2031-2100 regardless of in_effect. Otherwise the reform applies only
+    # in the years from 2031 onward in which in_effect is true.
+    if bypass:
+        return create_ca_prop3()
+
+    if _active_windows(parameters.gov.contrib.states.ca.prop3.in_effect):
+        return create_ca_prop3(respect_in_effect=True)
+    else:
+        return None
+
+
+ca_prop3 = create_ca_prop3_reform(None, None, bypass=True)