Proposition 42: California Prohibit New Taxes on Retirement Holdings, Personal Assets, and Savings and Limit Retroactive Taxes Initiative

Prop 42: Yes (Tax Limits)

Prop 42 closes a door that should never have been open: taxing Californians on wealth they have not realized and may never see. It bars new state taxes on owning savings and assets (https://growsf.org/voter-guide/san-francisco-voter-guide-november-2026-election/measures/prop-42/legal-text/#prop-42-ownership-tax-ban) and bars retroactive taxes (https://growsf.org/voter-guide/san-francisco-voter-guide-november-2026-election/measures/prop-42/legal-text/#prop-42-retroactive-ban) that reach back to conduct or residency before a law takes effect. Every existing tax stays (https://growsf.org/voter-guide/san-francisco-voter-guide-november-2026-election/measures/prop-42/legal-text/#prop-42-existing-taxes): when you sell stock, collect royalties, or cash out a business, California taxes you today and will tax you the same way after Prop 42.

Ownership taxes fail on their own mechanics. Assets without market prices cannot be fairly valued, illiquid holdings force owners to sell or borrow to pay bills on paper gains that may evaporate, and retroactive taxes break the basic bargain that rules are known before they bind. These defects are not hypothetical: they are why Prop 40 (https://growsf.org/voter-guide/san-francisco-voter-guide-november-2026-election/measures/prop-40/), this ballot's one-time wealth tax, needs installment schedules, deferral mechanisms, and appraisal fights (https://itep.org/expert-report-on-the-california-2026-billionaire-tax-revenue-economic-and-constitutional-analysis/) just to function.

This is a constitutional lockout, and we are generally wary of those. But defining what kind of thing the state may tax is exactly what constitutions are for: the federal income tax required an amendment (https://constitution.congress.gov/constitution/amendment-16/) to exist, Prop 13 already caps property tax rates, and a future majority can amend this the same way (https://ballotpedia.org/Amending_the_California_Constitution) this majority enacts it.

Know what you are voting on, though. Prop 42 was funded almost entirely by Building a Better California (https://ballotpedia.org/California_Prohibit_New_Taxes_on_Retirement_Holdings,_Personal_Assets,_and_Savings_and_Limit_Retroactive_Taxes_Initiative_%282026%29), the committee backed by Sergey Brin and other tech founders, and its protected-asset list (business interests, digital assets, intellectual property) reads like their portfolios. It also carries a clause that voids Prop 40 outright (https://growsf.org/voter-guide/san-francisco-voter-guide-november-2026-election/measures/prop-42/legal-text/#prop-42-conflicting-measures) if Prop 42 gets more yes votes. We oppose Prop 40 on its own merits, so neither changes our vote. Judge the text, not the donors.

Prop 42 keeps every tax California has and stops only the ones that tax you for owning what you already earned. Vote yes.

Source (https://growsf.org/voter-guide/san-francisco-voter-guide-november-2026-election#prop-42)

Yes on Prop 42: Stop the Savings Tax

Prop 42 would prohibit state and local politicians from imposing a Savings Tax on Californians.  Prop 42 would prohibit politicians from taxing the value of your savings, checking account, 401k, stock portfolio, and current equity in your home. We already pay the highest taxes on income, sales, property, gas and our cars— we don't need a Savings Tax on top of all that! If Prop 42 gets more votes than Prop 40, the Wealth Tax dies even if it passes. Every YES on 42 is a second NO on 40.

Source (https://www.reformcalifornia.org/voter-guides/san-diego)

YES on Prop. 42

In direct opposition to the “wealth tax,” this measure would prohibit any new state tax that taxes the ownership or control of personal property or applies retroactively based on activities or status that existed before the effective date of the new state tax. This will protect Californians, especially homeowners, from the risk of a “wealth tax” on the value of homes or any other accumulated savings and investments.

Vote YES on 42.

Source (https://www.hjta.org/2026votingguide#Ballot-Measure-Recommendations)

Amends the California Constitution to prohibit new state taxes based on ownership or control of personal property—including financial assets, investments, business interests and intellectual property—and restricts certain retroactive state taxes; real estate is excluded. CADC supports Prop. 42 because it establishes a constitutional limit against new wealth or asset taxes and retroactive taxation. It also directly conflicts with Prop. 40's proposed billionaire wealth tax, so if both measures pass, their competing provisions could ultimately depend on which receives more affirmative votes or on judicial resolution.

CADC 認為應以州憲法限制政府新增財富、資產及追溯性稅項，同時制衡提案 40 所提出的億萬富豪財富稅，因此支持提案 42。

Source (https://www.sfcadc.org/11_2026_propositions)

Prop 42 - Prohibits New State Personal Property Taxes & Certain Retroactive Taxes

Endorsement: YES on Proposition 42

California already has the highest cost of living, and some of the highest taxes, in America. Maybe let taxpayers keep a little of what they earn?

Proposition 42 stops Sacramento from running amok with your family’s financial stability.

Hey, Sacramento! Go ahead: tax our income, but not our stuff. If the government wants more money, it should first prove it can use the piles of tax dollars it currently has responsibly. (Maybe claw back some of that EDD fraud, hospice fraud, and the $25B for a non-existent high-speed rail before you double-tax us).

Stop treating Californians like an ATM.

Vote YES on Proposition 42

Source (https://www.connectedsf.com/2026-voter-guide#prop-42)

Proposition 42: Prohibits New State Personal Property Taxes and Certain Retroactive Taxes – YES. Proposition 42 would bar new state taxes on the ownership of financial assets and other personal property and would limit retroactive taxes. It would not eliminate existing taxes on income, earnings, sales, or retirement distributions. The attached campaign-sponsored survey found that 69% of likely voters say retirement saving has become harder and 65% are not confident they can retire comfortably in California. For Black families and other communities of color – who have had fewer opportunities to accumulate and pass on wealth – protecting savings, investments, retirement security, and small-business interests from new ownership taxes provides needed certainty. Protecting job creation and Black-owned business growth is central to our economic-empowerment agenda. We believe in taxing the wealthy fairly, and we also believe in protecting the nest eggs and businesses our communities have worked generations to build. Vote Yes.

Source (https://cahinaacp.org/our-vote-our-voice-where-we-stand-on-every-2026-ballot-measure)

Prop 42 would prohibit state and local politicians from imposing a Savings Tax on Californians. Prop 42 would prohibit politicians from taxing the value of your savings, checking account, 401k, stock portfolio, and current equity in your home. We already pay the highest taxes on income, sales, property, gas and our cars— we don't need a Savings Tax on top of all that! If Prop 42 gets more votes than Prop 40, the Wealth Tax dies even if it passes. Every YES on 42 is a second NO on 40.

Endorsement: YES on Proposition 42

California already has the highest cost of living, and some of the highest taxes, in America. Maybe let taxpayers keep a little of what they earn?

Proposition 42 stops Sacramento from running amok with your family’s financial stability.

Hey, Sacramento! Go ahead: tax our income, but not our stuff. If the government wants more money, it should first prove it can use the piles of tax dollars it currently has responsibly. (Maybe claw back some of that EDD fraud, hospice fraud, and the $25B for a non-existent high-speed rail before you double-tax us).

Stop treating Californians like an ATM.

Vote YES on Proposition 42

Billionaires be flippin’ their shit. In response to the billionaire wealth tax Prop 40, these 3 measures are largely being funded by former California resident and Google co-founder Sergey Brin and his billionaire besties. And, as you may have noticed, they’ve got plenty of $$$ to throw at ad campaigns to mislead and confuse voters. 

Propositions 41, 42 and 43 all seek to make it way more difficult to mount campaigns to tax the wealthiest 1%.  

Proposition 41 sounds like a good idea since it has all the hallmarks of good governance—ensuring audits of programs funded by new taxes, and enforcing state spending caps to limit waste. But, as usual, the real purpose of the measure is buried in the fine print: it’s a poison pill to retroactively invalidate Proposition 40, the billionaire tax. Nice try, Moneybags!

Proposition 42 says it will protect the retirement and personal savings of regular Californians from government overreach, but once again its main design is ALSO a poison pill to retroactively invalidate Prop 40! Soo original.

Proposition 43 has the unusual and dubious honor of being opposed by its congressional sponsor. State Assembly Member Buffy Wicks is now actively campaigning against her own measure (long story short, she put it on to block something worse (https://www.sfchronicle.com/politics/article/ballot-measure-constitutional-amendment-wicks-22330312.php)). Prop 43 would make it extremely difficult for cities and counties to raise new local revenue, by raising the minimum threshold of passage to a 2/3 super-majority of votes (currently a 50+1 simple majority is required for a voter-led set-aside tax measure to pass.) So, two good reasons to hate this one: 1. making it harder to raise money for local services from the mega-rich, and 2. making it harder to win at the ballot? No effing way! 

Vote Hell No! on Propositions 41, 42 and 43.

Source (https://www.theleaguesf.org/#Prop42)

SPUR's Recommendation

Prop. 42 was primarily placed on the ballot to defeat Prop. 40, a competing tax measure on billionaires. If passed, it would constrain local and state governments’ current and future ability to raise revenues for much-needed housing, transportation, infrastructure, and social services, which are already facing cuts at the federal and state levels.

What Prop. 42 Would Do

Proposition 42 would block state and local governments from implementing any new taxes on personal property, including retirement holdings, personal savings, real estate, stocks, and other assets. It would prohibit retroactive taxes based on a person’s prior residency status.

The measure is designed to nullify Prop. 40 (https://www.spur.org/voter-guide/ca-prop-40-billionaire-tax), which imposes a one-time excise tax of 5% on billionaires based on retroactive residency.

The Backstory

Federal bill H.R. 1, known as the “Big Beautiful Bill,” was enacted in July 2025 and will make heavy cuts to critical social safety net programs across the state, including about $19 billion in annual cuts to Medi-Cal, which covers half of children aged 0 to 5 and nearly 15 million low-income Californians. Funding cuts are projected to accelerate hospital closures across California, particularly in rural areas. They are also expected to heavily impact food assistance programs such as CalFresh and the Supplemental Nutrition Assistance Program (SNAP), which serves an estimated 5 million Californians.

The proposed Prop. 40 billionaire tax aims to help offset federal funding cuts. It would create a new tax on wealth, including financial assets such as stocks and intellectual property that California does not currently tax, and would apply retroactively to billionaires residing in California on or after January 1, 2026. California currently taxes income and property such as real estate, but not financial assets or other forms of wealth.

Prop. 42 was placed on the ballot through a signature-gathering effort led by Building a Better California, which is funded by Google co-founder Sergey Brin and other billionaires, to counter Prop. 40. It requires a simple majority to pass (50% plus one vote). If both Prop. 42 and Prop. 40 pass, the measure receiving more votes would prevail. (Building a Better California has also placed Prop. 41 (https://www.spur.org/voter-guide/ca-prop-41-audits-special-taxes), a separate countermeasure to Prop. 40, on the ballot.)

Equity Impacts

California’s current tax system disproportionately benefits high-income households, while lower-income households bear a greater burden from high housing costs and regressive taxes such as property and sales taxes. California’s practice of not taxing inherited wealth and financial assets contributes to income inequality and persistent racial disparities. U.S. Census data show that low-income families in California are much more likely to be Latino or Black, while most high-income families are white or Asian.

This proposition, which restricts new taxes on personal property, including retirement holdings, personal savings, real estate, stocks, and other assets, would block efforts to create new progressive tax policies to fund important priorities, including health care, food assistance, and other programs that disproportionately benefit lower-income Californians and communities of color.

Pro

• Banning retroactive taxes would create more predictability for taxpayers.

Cons

• Prop. 42 was placed on the ballot to block a competing measure. It could affect the state’s ability to raise revenue from other tax measures in the future.
• Applying taxation limits would constrain governments’ ability to fund urgent priorities, especially amid unprecedented federal and state budget cuts.

Source (https://www.spur.org/voter-guide/2026-11/ca-prop-42-personal-property-taxes)