California voters have rejected a proposed tax on billionaires and approved Proposition 42, a measure that enacts protections against new taxes on personal assets, including retirement accounts and digital property. The results mark a significant setback for wealth-tax advocates in the state.
Proposition 42 passed with just over 51% of the vote, according to Associated Press projections. The measure prohibits new taxes on personal property, such as 401(k) accounts, business interests, digital assets, and intellectual property, though real estate is excluded. It also restricts retroactive taxation unless a state-declared emergency is in effect.
The measure was designed as a safeguard, intended to nullify a separate proposed billionaire wealth tax, Proposition 40, if both passed. With Proposition 42's passage, the proposed tax on billionaires has been defeated. The group Building a Better California, funded by tech executives including Google co-founder Sergey Brin, supported Proposition 42.
Opponents of the wealth tax, such as the Howard Jarvis Association, argued that voters were concerned about potential government targeting of personal savings. "Voters are concerned that the retirement savings that they have might have been a target for taxation in the future," Susan Shelley, vice president of communications at the Howard Jarvis Association, told The Los Angeles Times.
Supporters of Proposition 42 noted that any future attempts to tax personal assets would require voters to first overturn Proposition 42. Wealth-tax advocates may consider returning with new proposals for future ballots.