A wave of texts and mailers warning that California politicians are targeting retirement savings for taxation has sparked confusion among voters, but experts say the claims mischaracterize a broader fight over competing ballot initiatives.
At issue is a proposed measure called the Retirement and Personal Savings Protection Act, one of several initiatives tied to an emerging political battle over a potential billionaire’s tax in California.
Some Californians recently received messages framed as urgent warnings. One “URGENT” text message reads: “Even though California has some of the highest taxes in the country, Sacramento politicians and special interests are still pushing to pass new taxes on retirement and savings accounts,” the San Francisco Chronicle reported.
Despite the alarm, state tax policy experts say California has not attempted to broadly tax retirement account balances or savings assets for residents.
Instead, the messaging is reportedly tied to a campaign over proposed constitutional changes that would shape what kinds of taxes the state could impose in the future.
Proposed retirement-related legislation is one of multiple competing initiatives backed in part by the political action committee Building a Better California. The group is also linked to efforts that could affect a separate proposal known as the billionaire’s tax.
The retirement measure would bar the state from imposing new taxes on the “ownership or control” of personal property — including financial assets, business interests, digital assets, intellectual property, and tangible property such as boats or aircraft. But it would not block taxes on real estate or on income generated from assets, such as wages, pensions, dividends or capital gains.
California ranked No. 8 on a list of states with the strongest retirement savings and home equity levels, according to 2022 U.S. Census Bureau data adjusted to December 2024 dollars.
A typical California household has a median net worth of $295,838 and median retirement savings of $96,131, the data shows. Its median deposit account balance stands at $17,046, and 62.1% of households have a net worth of $100,000 or more.
Billionaire’s tax debate
The retirement tax initiative is closely tied to opposition against a separate proposal that would impose a one-time tax on Californians with a net worth exceeding $1 billion.
That proposal — backed by the Service Employees International Union–United Healthcare Workers West — would apply a 5% tax on qualifying high-value assets.
While framed as targeting the ultra-wealthy, critics say the competing measures are designed to neutralize each other politically.
Darien Shanske, a law professor at the University of California at Davis, described the initiatives as “revengements,” or revenge amendments.
“They are all deceptive,” he told the Chronicle. “People who vote for the billionaire tax might not realize they could frustrate that vote by also voting for one or more of the revengements.”
Building a Better California has raised significant funding from prominent tech and finance figures, the Chronicle report — including Google co-founder Sergey Brin, Kleiner Perkins Chairman John Doerr, Stripe CEO Patrick Collison, venture capitalist Michael Moritz, Doordash CEO Tony Xu, Affirm CEO Maksim Levchin, Ripple executive chairman Chris Larsen and former Google CEO Eric Schmidt.
A spokeswoman told local reporters the organization is working on “long-term policy reforms that will improve government accountability, protect the state’s jobs and economic engine and prioritize affordability and a better quality of life for Californians.”
What comes next?
Two additional initiatives backed by the group could affect how tax revenue is allocated and overseen.
One would require stricter auditing and transparency for special taxes, while another could redirect or constrain how some new taxes are used under existing school funding and state spending rules.
Supporters say these measures increase accountability. Critics argue they could limit voter-approved tax policies.
“A few billionaires are spending tens of millions to deny Californians the opportunity to save their local hospitals and ERs — but so far, those billionaires are failing,” said Suzanne Jimenez, chief of staff for the union backing the billionaire’s tax.
Both sides are currently gathering signatures to qualify competing measures for the November ballot.
If approved by voters, conflicting provisions would be resolved in favor of whichever measure receives more “yes” votes.
This article was written by Jonathan Delozier and generated with the assistance of HousingWire Automation. It was reviewed by a HousingWire editor before publication. The system helps convert company announcements and industry data into HousingWire-style news coverage.
