Californians already pay some of the highest income taxes in the country. Proposition 42 seeks to protect the money they have saved for retirement and to keep politicians from imposing a new tax on those funds, even retroactively. That is why firefighters, workers, seniors and small businesses support the measure and urge voters to vote yes.
Approximately 80 percent of Californians have some kind of retirement savings. These funds represent decades of work, planning and sacrifice. Proposition 42 seeks to protect accounts such as 401(k) plans, individual retirement accounts (IRAs), pensions and personal savings accounts from new taxes.
The principle is simple: people already paid taxes on the money they earned. They shouldn’t have to pay taxes again on that same income just because they set it aside for their future.
However, the California Constitution currently allows politicians and special interest groups to push for new taxes on retirement accounts, lifelong savings and other personal assets. Proposition 42 would close that loophole with a constitutional protection that limits that possibility and prohibits retroactive taxes on these assets.
The idea of taxing personal and retirement savings again has come up repeatedly in Sacramento. Although these proposals don’t always become law, their recurrence creates uncertainty for those who have spent decades preparing for retirement.
The risk is especially concerning when the state faces budget deficits. Retirement savings may look like a tempting source of revenue for legislators, but that money doesn’t accumulate overnight. It is built over decades, with the expectation that the rules won’t change after people have saved.
Consider workers like firefighters who, besides risking their lives, have contributed to their retirement fund for 30 years; or the small business owner who saved deposit after deposit to secure financial stability in old age; or the senior who depends on savings to cover living expenses. A new tax could directly affect the resources these people count on to live during retirement.
Changing the rules after people have saved punishes those who planned responsibly for their future. It also undermines trust in a system that should offer stability to working families.
Proposition 42 seeks to establish that protection and keep future political decisions from putting at risk the savings Californians have already accumulated.
You worked for that money. You paid your taxes. You saved it for your future.
Vote yes on Proposition 42 to protect your savings and keep them from being taxed again.