California voters have approved Proposition 42, a statewide measure that bans new taxes on an array of personal assets.
While votes are still being counted across the state, the Associated Press on Friday declared that the ballot measure had passed. The measure had just over 51% votes in favor and nearly 49% opposed, with about 96% of votes counted.
Prop. 42 has led by a narrow margin since the vote count began on Nov. 3.
The proposition bars any new tax on personal property, such as 401(k) accounts, business interests, digital assets, intellectual property, and personal belongings. Real estate isn’t included. It also prohibits retroactive taxes, except in cases of a state-declared emergency.
Proposition 42 was put on the ballot as a “poison pill” to nullify Proposition 40, a one-time tax on billionaires’ assets that also appeared on the Nov. 3 ballot. Voters rejected Proposition 40, but passed Proposition 42, closing off a potential source of money for the state.
If Proposition 40 had passed, Proposition 42 would have nullified the wealth tax if it received more votes.
The state generally taxes income, but not the unrealized gains of assets.
Its passage means that “voters are concerned that the retirement savings that they have might have been a target for taxation in the future,” said Susan Shelley, vice president of communications at the Howard Jarvis Assoc., which opposed the tax.
Proposition 42 was put on the ballot by Building a Better California, a group funded by Google co-founder Sergey Brin, venture capitalists and other tech executives. The group opposed Proposition 40.
The California Small Business Assn., the California Senior Alliance, and the California Professional Firefighters organization also backed Proposition 42.
“Taxes and cost of living are already too high in California — we need protection against taxes on our personal property and retirement savings,” supporters wrote in favor of the measure.
Proposition 40 backers said they may return with a proposed wealth tax for the 2028 ballot. Any attempt to target personal assets would require asking voters to nullify Proposition 42.
The post Voters pass Proposition 42, barring new taxes on personal assets appeared first on Los Angeles Times.
