California voters are set to vote on Proposition 42, which could make it more difficult to pass wealth taxes in the state going forward.
The initiative, sponsored by opponents of Prop. 40, would prohibit any new state tax based on ownership of personal property other than real estate, including retirement accounts. The new law would be applied retroactively based on the taxpayer's past activities.
According to the California Secretary of State's Voter Guide, it would nullify all wealth taxes enacted after Jan. 1, 2026, which includes Prop. 40, if it or Prop. 41 receives more votes.
Opponents, which include the California Democratic Party and SEIU-United Healthcare Workers West, say the proposition is "just another billionaire-funded trick."
"Prop. 42 isn't really about protecting your retirement savings — its only real purpose is to undo the California Billionaire Tax," the voter guide says. "Billionaires would rather millions of Californians lose healthcare than pay a modest tax on their extreme wealth."
Supporters, including California Professional Firefighters and Reform California, say the proposition's passage would protect retirement accounts from extra taxes.
"California's Constitution currently allows the Legislature to tax retirement and savings—even though you already paid taxes on that money when you earned it," the voter guide says. "Prop. 42 protects Californians from this double taxation by prohibiting new and retroactive taxes on personal property, including retirement and savings."
