Texas Ballot Initiatives Could Revolutionize Tax Policy Nationwide

On Election Day, Texas voters will decide on three tax amendments that could cement the state as the national model for pro-growth policy by banning taxes on capital gains and certain financial transactions and abolishing inheritance and death taxes. If approved, the changes could reverberate throughout other states and perhaps lay the groundwork for a national shift toward lower taxes.

Even in a state already known for low taxes and light regulation, the tax amendments up for a vote would add another layer of long-term certainty for investors and employers if passed. Texas law already forbids income taxes, but these additional constitutional bans would make other future tax hikes far more difficult to pass.

Three of the 17 statewide constitutional amendments on Texas’s November 4 ballot deal directly with taxes and business growth.

Proposition 2 would prohibit the state from taxing realized or unrealized capital gains of any individual, family, estate, or trust, effectively closing the door on future attempts to tax investment income. This would be a major boon for anyone who uses the stock market to invest for retirement.

Proposition 6 would prohibit the state from imposing occupation-based taxes on certain securities-transacting entities (e.g., finance firms/brokers) or taxes on securities transactions. In other words, the legislature would no longer be allowed to create or levy any new taxes on the buying, selling, or trading of stocks, bonds, or other financial securities—or on the businesses that facilitate those transactions.

That’s good news for everyday Texans because it helps keep investment costs low, protects retirement and savings accounts from new taxes, and reinforces Texas’s reputation as a low-tax, pro-business state that attracts jobs and capital.

Proposition 8 would prohibit the state from enacting an estate or inheritance tax, codifying Texas’s long-standing opposition to “death taxes.” Farmers and ranchers in particular stand to benefit from this amendment.

All three measures passed the Texas Legislature earlier this year with overwhelming Republican support and even backing from Democrats, reflecting a rare bipartisan consensus that Texas’s low-tax environment is central to its economic edge.

Since 2020, when many states strangled small businesses with their draconian pandemic mandates, Texas’s steady, pro-growth environment has drawn residents and employers from higher-cost states in record numbers. Companies fleeing regulation-heavy blue coastal areas found refuge in Texas where growth was encouraged, not penalized.

Nowhere is that momentum clearer than in Dallas–Fort Worth, which has evolved into a full-fledged financial hub dubbed “Y’all Street.”

A few square miles of the city are now home to the future Texas Stock Exchange, backed by BlackRock and Citadel Securities, alongside NYSE Texas and Nasdaq Dallas, both launched this year to serve the state’s surging capital markets. The clustering of exchanges signals that Texas is no longer just attracting business – it’s building its own financial infrastructure.

The corporate footprint is expanding just as fast. Goldman Sachs is building a 5,000-employee Dallas campus, Wells Fargo has opened an 850,000-square-foot complex in nearby Irving, and Charles Schwab relocated its headquarters to Westlake.

These developments have helped push Texas ahead of New York in finance sector jobs. Low taxes and predictable policies reduce operating risk. The future of finance in America may well be in Dallas.

Austin has also become Dallas’s technological counterpart. The city now hosts major operations from Apple, Dell, IBM, Samsung, Oracle, and Tesla, whose corporate headquarters moved from California in 2021.

Nearby, Samsung’s $17 billion semiconductor plant, one of the largest in the world, is set to open right outside Austin, anchoring the state’s high-tech manufacturing base.

Texas is unsurprisingly outpacing the rest of the nation in population growth. Since 2020, the state has added more than two million residents, pushing its population above 31 million. It is now on track to surpass California as the most populous state by 2045.

That influx is mirrored in the labor market: finance and insurance employment in Texas climbed 27 percent from 2019 to 2024, while New York’s grew only five percent over that same time period, according to Bureau of Labor Statistics data.

Housing and cost dynamics complete the picture. Texas now accounts for 15 percent of all U.S. new home permits, and the median listing price, about $360,000, is roughly $40,000 below the national average.

Affordable housing, predictable taxes, and a deep job base have made the Lone Star State the destination of choice for both employers and employees seeking stability.

By contrast, the states Texas is poaching from, like New York and California, are doubling down on the policies driving people out. Both maintain steep income and capital gains taxes along with layers of local business and payroll levies, and routinely float new transaction-tax ideas on trades and stock buybacks.

Corporate America has taken note. Major banks, tech firms, and asset managers now hedge their exposure to high-tax states with satellite campuses or full relocations to Texas, Florida, and other red states, diversifying headcount away from high-cost blue locales. For executives weighing the next decade, the calculus is simple: the surest long-term hedge against policy volatility is a ZIP code in a solidly Republican area.

All three tax ballot initiatives cleared the Texas Legislature with the two-thirds support needed to reach voters, a rare agreement in any statehouse. For companies deciding where to grow, that’s the draw. Economic policies can shift, but constitutional limits can’t.

On November 4, voters can lock in these amendments, enshrining Texas’s low-tax reputation in the state constitution. As other red states work to compete with Texas for businesses looking to flee high-tax blue states, lawmakers in Tennessee, Florida, and elsewhere could aim to mimic Texas’s moves.

In a climate where policy can change faster than business plans, economic predictability is why Texas keeps winning – and driving a broader movement to put more money back in the pockets of hard-working American families.

Sarah Katherine Sisk is a proud Hillsdale College alumna and a master’s student in economics at George Mason University. You can follow her on X @SKSisk76.