If passed, the constitutional amendment would block a potential source of future government funding and would disproportionately benefit wealthy households.
Greg Abbott, Governor of Texas, during a press conference in September 2025.
(Mark Felix/Getty)
This November, 17 constitutional amendments will be on the ballot in Texas, ranging from bail reform to funding for dementia prevention. But most of the proposed measures relate to tax rights, prohibitions and exemptions. Among them there are Sentence 2which calls for “a ban on capital gains tax on individuals, estates and trusts.”
If passed, Texas would not be able to levy taxes on both “realized and unrealized capital gains,” that is, profits realized from the sale or ownership of investments, including stocks, bonds, real estate and personal vehicles. Although there have been no polls on the issue, state voters are likely to support Proposition 2. The state has proposed three tax bans since 1993, and all three were approved by voters. Capital gains taxes were already effectively banned under the 2019 income tax proposal, and in 2023, voters in Texas approved a ban on “wealth tax” with almost 68 percent of the vote.
IN video Since May, Texas Gov. Greg Abbott has sought to sign a joint resolution that would allow voters to “ensure that we are not going to impose a capital gains tax on Texans in the state of Texas.” Later he general that it is “a continuation of our collective disdain in Texas for taxes of any kind.”
Most states only tax realized capital gains (and none tax unrealized capital gains). Although Texas does not currently levy any capital gains tax, the proposal, if passed, “would pose a permanent barrier to a future legislature or electorate being willing to adapt our tax code to changing needs,” Dr. Cathy McAuliffe, a former school board candidate for the Rockport-Fulton Independent School District, wrote in her report. letter to the editor To Rockport Pilot. “Texans deserve flexibility to address emerging issues.”
A ban would disproportionately benefit wealthy families, many of whom have moved to the state in recent years. In 2025 more 10 percent people per Forbes List 400 According to the Institute on Taxation and Economic Policy, the richest people in the United States were Texans, and the state has one of the most regressive tax systems in the country, with the state's lowest-income households paying largest share their income in the form of taxes.
Several editorial boards across the state expressed unfavorable opinions on Proposition 2, including Houston Chronicle And San Antonio Express-News. In October, the magazine's editorial staff Austin American-Statesman asked readers to vote against the proposal, saying that if passed, the constitutional amendment would eliminate a potential source of future funding. “Capital gains tax breaks primarily benefit wealthy households and worsen racial wealth inequality,” they wrote. Statesman. “Those at the top should not be permanently protected if Texas ever needs new sources of funding.”
