If handed, the constitutional modification would lock out a possible supply of future state funding and disproportionately profit rich households.
Greg Abbott, governor of Texas, throughout a information convention in September 2025.
(Mark Felix / Getty)
In Texas, 17 constitutional amendments will likely be up for a vote this November, on points from bail reform to funding for dementia prevention. However the majority of the proposed measures concern tax rights, bans, and exemptions. Amongst them is Proposition 2, which calls to “Prohibit Capital Positive factors Tax on People, Estates, and Trusts.”
If handed, the state of Texas wouldn’t have the ability to acquire taxes on each “realized and unrealized capital good points,” which means earnings generated from promoting or holding an funding—together with shares, bonds, actual property and private automobiles. Although there was no polling on the difficulty, voters within the state are prone to cross Prop 2. Since 1993, the state has proposed three tax bans, and all three have been authorized by voters. Underneath the 2019 earnings tax poll proposal, capital good points taxes have been already successfully banned, and in 2023, voters in Texas authorized a ban on a “wealth tax” with practically 68 % of the vote.
In a video from Could, Texas Governor Greg Abbott was desirous to signal a joint decision that may enable voters to “be sure that we aren’t going to have a capital good points tax on Texans within the state of Texas.” He later shared that it’s “an extension of our collective disdain in Texas for any sort of tax.”
Most states solely tax realized capital good points (and none of them tax unrealized good points). Although Texas doesn’t at the moment impose any capital good points tax, the proposal, if handed, “erects a everlasting barrier to a future legislature or voters keen to regulate our tax code to altering wants,” wrote Dr. Cathy McAuliffe, a former candidate for the Rockport-Fulton Unbiased College District college board, in a letter to the editor to the Rockport Pilot. “Texans deserve the pliability to deal with evolving challenges.”
The ban would disproportionately profit rich households, a lot of whom have flocked to the state lately. In 2025, over 10 percent of the individuals on the Forbes 400 List of the richest individuals in the USA have been Texas residents, and the state has one of the regressive tax techniques within the nation, in keeping with the Institute on Taxation and Financial Coverage, with lower-income households within the state paying the greatest proportion of their earnings in taxes.
A number of editorial boards throughout the state have expressed a detrimental opinion of Prop 2, together with the Houston Chronicle and the San Antonio Express-News. In October, the editorial board of the Austin American-Statesman requested readers to vote no on the proposal, saying that, if handed, the constitutional modification would take away a possible supply of funding sooner or later. “Tax breaks on capital good points primarily profit rich households and worsen racial wealth inequality,” wrote The Statesman. “These on the high shouldn’t be completely shielded if Texas ever wants new funding sources.”
