Proposition 42 says it protects your 401(k). Who does it really protect? | Opinion

The backers of Proposition 42 want voters to believe it is needed to prevent state legislators from raiding the retirement accounts of everyday Californians.

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But the principal backers of Prop. 42 are billionaires seeking to avoid higher taxes and thwart Proposition 40, the controversial ballot measure that would impose a one-time wealth tax on California’s richest residents.

Prop. 42 is one of two ballot measures that could derail Prop. 40. The other is Proposition 41. Under the California Constitution, when two measures approved in the same election conflict, the one receiving more affirmative votes prevails. Thus, if either Prop. 42 or Prop. 41 receives more yes votes than Prop. 40, the one-time 5 percent wealth tax on Californians with more than $1 billion in assets would not take effect

At its core, Prop. 42 is presented as a safeguard for personal property and 401(k) accounts. If approved, it would bar new state taxes on those assets, though its real purpose is to shield billionaires from the tax proposed by Prop. 40.

The suggestion that any governor who would raid the modest retirement nest eggs or property of middle-class Californians is crazy because that governor would soon be unemployed for trying. Even the left-leaning state Legislature, which enjoys spending more than it should, knows not to mess with your 401(k).

Prop. 42 purports to address a problem that does not exist. It on personal property—including retirement accounts, savings, investments and business interests—and restrict certain retroactive taxes. The measure would embed those limits in the California Constitution, leaving voters as the only route to change them.

Even without Prop. 40 on the ballot, Prop. 42 would create the illusion of permanently settling California tax policy on financial assets and other personal property. In fact, it would restrict the state’s future options for taxing those assets, while a later constitutional amendment or competing voter-approved measure could still alter that policy.

Opponents claim that it is illegal to tax retirement accounts such as 401(k)s. This appears to be an unsettled legal issue because no government has been reckless enough to try. To assert that a constitutional amendment is necessary to protect the nest eggs of every-day Californians is beyond overreach.

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Proposition 40 squarely voters with a question: Should California impose a one-time wealth tax on roughly 200 residents with net worth above $1 billion? Prop. 42 exists to undermine that choice and should be judged accordingly—by the interests of the billionaires financing it.

Prop. 42 is a poison pill designed to derail the real debate over a one-time wealth tax on billionaires. Voters should reject the decoy and vote no.