Study examines impact of retirement taxes ahead of California vote
California voters will consider Proposition 42 to ban new retirement taxes after a study estimated potential asset levies could cut income by 20% to 37%.
Darrell Roberts spoke out in California ahead of the November election regarding a ballot proposal on asset taxes. The measure would bar new state levies on personal property and retirement savings accounts.
The study was commissioned by supporters of Proposition 42. Economists examined how a potential 1% annual tax might affect retirement assets.
The release does not identify any specific 1% tax proposal currently pending. These figures reflect study projections rather than taxes actively collected today.
Former Legislative Analyst’s Office Chief Economist Brad Williams conducted the analysis. The research evaluated workers with pensions and 401(k) plans.
Williams estimated the tax could reduce annual retirement income by 20% to 37%. Workers paying the levy might need to work three to seven extra years.
The analysis showed a representative California firefighter or peace officer could pay up to $276,814. A typical teacher could face $261,737 in taxes.
“I don’t want my retirement taxed, especially as I am trying to plan my future,” Roberts said.
Roberts serves as president of the California Professional Firefighters. The labor group endorsed Proposition 42.
“It’s difficult to live in the State of California…People are living paycheck to paycheck, and when there is a threat of a reduction in retirement simply because somebody is looking to tax it, we can’t stand for it.”
Under Proposition 42, new state taxes on personal property would be prohibited. This includes retirement accounts, financial assets, and business interests.
The proposal limits certain retroactive taxes. It applies to taxes enacted or taking effect on or after Jan. 1, 2026.
Backers also include the State Building and Construction Trades Council of California. The California Small Business Association also supports the measure.
Opponents argue the measure targets Proposition 40 on the November ballot. Proposition 40 creates a one-time levy on individuals with over $1 billion in global assets.
The official voter guide opposition calls Proposition 42 “just another billionaire-funded trick.” The text claims the measure aims to undo the billionaire tax.
Opponents include SEIU-United Healthcare Workers West and U.S. Sen. Bernie Sanders. They argue the measure could jeopardize state funding for health care services.
A cited statewide survey showed 69% of voters find retirement saving harder than five years ago. Another 65% were not confident about affording a comfortable California retirement. The survey release did not include sample size details.
State ballot measures allow citizens to enact laws or constitutional changes directly through statewide popular votes. California voters will decide on the measure during the Nov. 3 general election.
