The Texas State Legislature is sending three constitutional amendments to voters this November that would prohibit several types of taxes—Proposition 2, Proposition 6, and Proposition 8. 

Proposition 2 would prohibit realized or unrealized capital gains taxes and add language stating that the prohibition would not apply to ad valorem taxes on property, sales taxes on goods and services, or use taxes on the storage, use, or other consumption of goods and services in the state. Currently, Texas is one of eight states that do not tax capital gains. 

Proposition 6 would prohibit taxes on entities that enter into transactions conveying securities or on certain securities transactions. Securities include stocks, bonds, investment contracts, options, and shares in businesses or resources like oil or gas, as well as certificates or agreements that show ownership of an investment or the right to buy or sell one.

Currently, no state levies a financial transaction tax on securities. According to the Tax Foundation, New York had a financial transaction tax from 1905 to 1981, when the New York Stock Exchange considered leaving the state due to the tax. The tax is still in state law, but the state now offers a 100% rebate on the tax, effectively making it null.

Proposition 8 would prohibit a tax on a decedent’s property or the transfer of an estate, inheritance, legacy, succession, or gift. Texas previously had an inheritance tax that was repealed during the 2015 legislative session with the passage of Senate Bill 752. Proposition 8 would prohibit the state legislature from adopting a law to revive the inheritance tax.

A two-thirds supermajority vote of state legislators is required to place a constitutional amendment on the ballot in Texas. All three propositions had the support of at least 96% of voting Republicans, while 40-50% of voting Democratic legislators supported the amendments.

At the signing of the resolution to place the prohibition on securities transaction taxes on the ballot, Gov. Greg Abbott (R) said, “This is the extension of our collective disdain in Texas for any type of tax.”

Since the amendments would add the prohibitions to the state constitution, repealing them would also require a constitutional amendment approved by two-thirds of state legislators and a majority of voters.

Texas voters have approved similar tax prohibitions in 2019 and 2023. In 2019, voters approved Proposition 4, which prohibited the state from levying an income tax on individuals. It was approved with 74% of the vote. Prior to the 2019 vote, Texas voters had adopted a proposition prohibiting personal income tax without voter approval and directing revenue to education and limiting local school tax rates. In 2023, voters approved Proposition 3 with 68% of the vote. Proposition 3 prohibited the state from levying a wealth or net worth tax. 

Texas voters will be deciding on 14 other amendments this November as well. The amendments address property tax exemptions, oversight of the state judiciary, a state Dementia Prevention and Research Institute, parental rights, restricted-use funds, denying bail for certain violent or sexual offenses, and a citizenship voting requirement. 

Since the adoption of the Texas Constitution in 1876, Texans have decided on 711 ballot measures, all constitutional amendments—approving 530 and defeating 181 measures.