The RCJ votes No. This is another diversion to block Proposition 40. There is a scare tactic from proponents of Proposition 42 suggesting that failing to pass this proposition opens the door to having your retirement savings taxed, which is not true.
Proposition 42, on the November 3, 2026 California ballot, is a proposed constitutional amendment that would prohibit new state taxes on the ownership of financial assets and other personal property, and would restrict certain retroactive taxes.
What would it do?
A Yes vote would prohibit California from establishing new state taxes based simply on ownership of financial assets—such as stocks and investment accounts—as well as other personal property. It would also restrict new taxes that apply retroactively to activities or circumstances that occurred before the tax took effect.
Importantly, Proposition 42 does not eliminate existing taxes on personal property, and California already does not generally tax the ownership of stocks or investment accounts. Existing taxes on certain personal property, such as vehicle-related taxes and taxes on business equipment, would not simply disappear.
The measure has a major connection to Proposition 40, the proposed one-time billionaire wealth tax. Because Proposition 40 would tax financial assets and apply retroactively to January 1, 2026, the two measures conflict. If both pass, the measure receiving more “yes” votes could prevent the other from taking effect.
Arguments in favor
Supporters argue that:
- Californians should not face new taxes simply because they own savings, investments or retirement assets.
- People have already paid income taxes on money they earned and subsequently saved.
- The constitutional amendment would provide long-term protection against future taxation of accumulated savings.
- Restricting retroactive taxation would provide greater certainty to taxpayers about the rules that apply to their finances.
Supporters emphasize that the measure protects ordinary retirees, workers, veterans, small-business owners and savers, rather than merely wealthy Californians.
Arguments against
Opponents argue that the measure’s principal purpose is not retirement protection but preventing Proposition 40’s proposed billionaire tax from taking effect.
They point out that California currently does not tax the mere ownership of ordinary stocks and investment accounts. Instead, the state generally taxes income generated by those assets. Opponents therefore argue that the measure is addressing a largely hypothetical future tax while simultaneously blocking a specific tax aimed at billionaires.
They also argue that Proposition 42 would unnecessarily restrict the state’s future ability to raise revenue, potentially limiting funding for public programs. The Legislative Analyst’s Office says the measure could reduce future state tax revenues, although the amount is uncertain.
Who supports Proposition 42?
The principal supporting coalition is Yes on 42 — Protect Retirement and Life Savings, which describes itself as a coalition of retirees, blue-collar workers, seniors, veterans, small businesses and taxpayers.
Notable supporters include:
- California Professional Firefighters
- State Building and Construction Trades Council of California
- AMVETS Department of California
- California Small Business Association
- California Senior Alliance
- Peace Officers Research Association of California
- California Taxpayers Association
- Google co-founder Sergey Brin, who is a major financial supporter of the campaign.
According to California Secretary of State campaign-finance records, the principal support committee had reported approximately $49.3 million in contributions through August 2, 2026.
Who opposes it?
The principal organized opponent is SEIU–United Healthcare Workers West (SEIU-UHW), the union sponsoring Proposition 40. The California Democratic Party and California Federation of Labor are also listed among its opponents. Sen. Bernie Sanders is another prominent opponent.
The opposition’s central argument is that Proposition 42 is effectively a companion measure to Proposition 41 designed to defeat Proposition 40, rather than a response to an actual proposal to tax ordinary Californians’ retirement accounts.