California voters block future wealth taxes in major defeat for billionaire tax campaign - report

California voters approved Proposition 42, a constitutional amendment banning new state taxes on personal assets including investments and retirement savings. The measure passed with just over 51% of the vote, closing the door on future wealth taxes after voters also rejected a separate billionaire tax proposal.

California voters approved Proposition 42, a constitutional amendment banning new state taxes on personal assets, including investments, retirement savings, and business holdings. The measure passed with just over 51% of the vote, with nearly 49% opposed, according to the Associated Press. Proposition 42 prohibits California from introducing new taxes on the ownership of personal property such as 401(k) accounts, financial investments, digital assets, intellectual property, and business interests. Real estate is excluded from the restrictions. The amendment also prohibits retroactive state taxes except in cases of a state-declared emergency. The vote follows the defeat of Proposition 40, a separate ballot initiative that sought to impose a one-time 5% tax on California billionaires to raise revenue for healthcare, education, and food assistance. Proposition 42 was introduced as a competing measure to prevent Proposition 40 from taking effect. The campaign supporting Proposition 42 was organized by Building a Better California, a group financed by Google co-founder Sergey Brin, venture capitalists, and other technology executives. The measure also received backing from the California Small Business Association, the California Senior Alliance, and the California Professional Firefighters. Supporters argued the amendment would prevent future lawmakers from extending wealth taxes to retirement accounts and other financial holdings. Proposition 40 supporters have indicated they may return with another proposed wealth tax in the 2028 election, but any future proposal would need to address the constitutional restrictions established by Proposition 42.