Opinion: We’re just starting to save. Prop 42 makes sure that counts for something

Note from the editor: Propositions 41 and 42 directly affect the outcome of Proposition 40, also known as the Billionaire Tax. For more information, review the ballot initiative guide from CalMatters and read more of CALÓ News’ election coverage. 

Across California, many Latinos are the first in their families to have a retirement account. They grew up watching their parents work hard in jobs that never offered a 401(k) or a pension, and some of those parents now rely on their children for help. This generation is working to make sure their own kids don’t face the same situation. Prop 42, on the November ballot, protects the hard-earned retirement and life savings they are building. 

Saving doesn’t always come easy. Many Californians opened their first retirement account only when they finally got a job that offered one. Even then, every contribution competes with student loans, rent, child care and, for many families, money sent home to help their parents. They put away what they can each month anyway, making long-term plans based on the rules as they exist now. But those rules aren’t as secure as people assume. 

California’s Constitution currently allows politicians and special interests to pass new taxes on retirement accounts, life savings and other personal property. Since 2019, lawmakers in Sacramento have introduced five separate proposals to tax retirement and personal savings. None passed. The next one could. 

Californians already pay income taxes on the money they earn, at some of the highest rates in the country. They shouldn’t have to pay taxes on that money twice simply because it’s sitting in a retirement or savings account. A tax like this could be charged again every year the money stays put. 

That hits families who are just starting to save especially hard. Retirement savings need years to grow, and most of what an account is worth at the end comes from that growth. Taking a cut every year means losing that money and everything it would have earned later. 

Prop 42 closes that loophole, providing a constitutional protection to stop politicians from taxing retirement accounts, pensions, 401(k)s, IRAs, savings and other personal property. It also bans retroactive taxes, so the rules can’t be rewritten to go after money people have already saved. It does not cut funding for schools, public safety or health care, and it does not affect income or property taxes. 

That’s why firefighters, peace officers, construction workers, small business owners, veterans and seniors all support Prop 42. They come from different jobs and backgrounds, but they’re all trying to save for later. 

For many Latino families, a retirement account is a way to build a kind of security older generations never had. After years of hard work, they deserve the peace of mind of knowing the money they’ve earned and saved will be there when they need it. 

You earned and saved it. Voting Yes on Prop 42 protects it.