Prop 42 protects Californians from double taxation on the money we earn by closing a loophole in California’s Constitution that allows new state taxes on retirement accounts, personal savings, pensions, and other personal property.
You already pay income taxes when you earn your money. Proposition 42 ensures the state cannot tax that same money twice simply because it is sitting in a retirement account or savings account. It also prohibits retroactive taxes that would change the rules after you’ve already earned and saved.
You earned and saved it. Prop 42 protects it.
California is the third most expensive state for retirees. Our high cost of living and high taxes already make it difficult for people to get ahead or to save enough for retirement. A recent survey of Californians found that 73% know someone who has had to delay retirement for financial reasons.
Californians deserve peace of mind that their hard-earned savings will be there when they need them. Yet, California’s Constitution allows the Legislature and special interests to impose new state taxes on retirement accounts and personal savings. It should be illegal for politicians and special interests to tax our retirement and savings. Prop 42 closes that loophole and protects retirement, life savings and personal property from new taxes.
Yes. California's Constitution currently gives the Legislature the authority to impose taxes on personal property such as retirement accounts, pensions, 401(k)s, IRAs, bank accounts, and other personal savings.
In recent years, lawmakers have introduced five separate bills proposing taxes on retirement savings and other personal property. Although none became law, these attempts underscore that this authority already exists and has been tried repeatedly.
The Legislature should not be able to tax retirement accounts. Prop 42 provides that protection by closing the loophole in California's Constitution before it can be used to tax retirement savings and personal property.
Prop 42 protects retirement accounts, including 401(k)s, pensions, IRAs, and other retirement plans. It also protects personal savings accounts and other personal property that could otherwise be subject to new state taxes.
Even a small annual tax on retirement savings could reduce both the value of your retirement savings and the investment growth that helps build retirement security over time.
A recent economic analysis found that even a 1% tax on retirement could cause middle-class Californians to face annual tax bills of up to $10,000 and have to work up to seven additional years before retiring. Prop 42 protects 401(k)s and other retirement savings from new state taxes that would chip into retirement savings or force Californians to delay retirement.
No. Prop 42 does not reduce existing funding for schools, public safety, healthcare, transportation, or other state programs. It simply prohibits new state taxes on retirement savings and other personal property. Existing revenue sources and funding formulas remain unchanged.
No. Prop 42 protects everyone who works and saves for retirement, including teachers, firefighters, police officers, veterans, retirees, small business owners, and middle-class families. If you have retirement savings or personal savings, Prop 42 protects you.
Prop 42 is supported by a broad coalition of seniors, firefighters, veterans, building trades workers, small businesses, and working families who believe Californians should not pay taxes twice on the money they earn and save. This includes the California Professional Firefighters, California Senior Alliance, AMVETS, Dept. of California, State Building and Construction Trades Council of California, Peace Officers Research Association of California, and the California Small Business Association.