This would prohibit new taxes on financial assets — such as stocks — and other personal property. It also prohibits most retroactive taxes. Both of those provisions conflict with the wealth tax on billionaires proposed by Proposition 40, which seeks to tax financial assets and is retroactive to Jan. 1 of this year. If both measures pass and Proposition 42 receives more yes votes than Proposition 40, it’s likely the billionaire tax would not be enacted.
Yes Argument
Californians already pay income tax and shouldn’t also be taxed on money sitting in investment accounts. This measure closes a loophole to protect average people’s life savings and prohibits a change in rules after the fact by barring unfair retroactive taxes.
No Argument
This is another attempt to invalidate the billionaire wealth tax, disguised as a measure to protect the retirement accounts of average Californians. While average people pay income tax on their wages, billionaires’ wealth grows mainly through the rising value of stock they already hold, and they don’t have to pay taxes on those assets until they cash them out. Proposition 40 wouldn’t impose taxes on retirement accounts of anyone other than those of billionaires.
Key Supporters
In Support
- Sergey Brin, co-founder, Google
- California Professional Firefighters
- California Taxpayers Association
In Opposition
- California Democratic Party
- California Federation of Labor Unions
- SEIU-UHW West
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