Contest 11 of 14
Proposition 42
Prohibits New State Personal Property Taxes and Certain Retroactive State Taxes. Initiative Constitutional Amendment.
Fiscal Impact
Short Term
LAO gives no net estimate.
Long Term
LAO gives no net estimate — future tax revenue may grow more slowly because some tax options would be off the table.
Social Impact
- The measure prohibits new state taxes on personal property, including business interests, intellectual property, and financial assets in retirement and investment accounts.
- It also prohibits new state taxes that apply retroactively based on a taxpayer's conduct, activities, or status before the tax's effective date, for taxes from January 1, 2026.
- Supporters say the ban will protect retirement funds, pensions, and savings accounts held by workers, teachers, firefighters, police officers, and retirees from new taxes.
- Opponents say the measure was designed to cancel out Proposition 40, the one-time billionaire tax, rather than to change taxes on retirement savings.
A YES vote means:
The state is banned from creating new taxes on owning things like savings and investments, and from taxes based on past activity; taxes passed since January 2026 that break these rules are canceled.
A NO vote means:
The state keeps the power to create taxes like these in the future.
Cost (Legislative Analyst): Possibility that tax revenues will not go up as much in the future.
How these interact: Propositions 41 and 42 each say that if they pass with more YES votes than a conflicting measure on this same ballot, the conflicting measure does not take effect. Proposition 40 is a measure on this ballot that those rules could reach.
Source: CA Secretary of State, Official Voter Information Guide