No New Personal Property Taxes or Retroactive Taxes
Initiative Constitutional Amendment
What This Does in Plain English
This measure would permanently block California from creating new taxes on personal financial assets — like retirement accounts, stocks, savings, or business ownership stakes. It also bans any tax that applies retroactively to things you already own. Starting January 1, 2026, no new "wealth taxes" on these types of assets could be enacted.
The Problem It's Solving
- Several proposals in Sacramento have floated annual wealth taxes targeting millionaires and billionaires.
- Supporters of this measure argue that taxing savings, retirement funds, and investments discourages people from building long-term financial security.
- They also argue retroactive taxes — taxing you on money you already have — are fundamentally unfair.
What Changes
- No new taxes on: Retirement accounts (401k, IRA), financial accounts, stocks and investments, business ownership interests.
- No retroactive taxes: The state cannot go back and tax assets you already hold.
- Effective date: Applies to any new tax enacted on or after January 1, 2026.
- Constitutional barrier: Written into the state constitution, requiring another ballot measure to undo.
Who Is Behind It
Funded by Building a Better California, a committee backed by Californians to Protect Retirement & Life Savings — primarily representing wealthy individuals and financial industry interests.
Who It Affects
- High-net-worth individuals and families most at risk of wealth tax proposals
- Retirees with large IRA or 401k balances
- State lawmakers seeking new revenue sources for public programs
- Californians who depend on public services that could have been funded by a wealth tax
Arguments For
- Protects retirement savings of ordinary Californians, not just the ultra-wealthy.
- Provides certainty for long-term financial planning — you can save without fear of the rules changing.
- Prevents capital flight and business departures that could hurt California's economy.
Arguments Against
- Permanently limits the state's ability to tax extreme wealth, even in a fiscal crisis.
- Primarily protects the wealthy, who hold the vast majority of financial assets.
- Directly conflicts with measures like 25-0024A1 (the one-time wealth tax).
Fiscal Impact
Prevents the state from collecting potentially billions in future wealth-based tax revenue. No direct immediate cost, but significant long-term impact on available funding for public programs.