AUSTIN, Texas — Texas voters will head to the polls on November 4, 2025, to decide on a proposed constitutional amendment that would permanently ban the state from imposing taxes on capital gains. The measure, known as Senate Joint Resolution 18 (SJR 18), was passed by the Texas Legislature earlier this year and aims to solidify the state’s stance against taxing profits from the sale of assets such as stocks, bonds, and real estate.
Currently, Texas does not levy a personal income tax, which includes taxes on capital gains. However, supporters of the amendment argue that enshrining this policy into the state constitution would prevent future legislatures from introducing such taxes, thereby maintaining Texas’s reputation as a low-tax, business-friendly environment. Governor Greg Abbott emphasized this point, stating that the amendment would “ensure that Texans never face a state capital gains tax” and would “protect our state’s economic competitiveness.”
Proponents of the amendment believe that a constitutional ban on capital gains taxes will attract investors and entrepreneurs to Texas, fostering economic growth and job creation. They argue that the certainty provided by the amendment will encourage long-term investments and financial planning among residents and businesses alike.
However, critics express concerns that the amendment could limit the state’s fiscal flexibility in the future. They argue that by prohibiting a potential source of revenue, Texas may face challenges in funding essential public services, such as education and infrastructure, especially during economic downturns. Some opponents also point out that the benefits of the amendment may disproportionately favor the wealthy, who are more likely to realize significant capital gains.
The proposed amendment specifies that the ban would apply to both realized and unrealized capital gains of individuals, families, estates, and trusts. It would not affect other forms of taxation, such as property taxes, sales taxes, or use taxes on goods and services. If approved by voters, the amendment would take effect on January 1, 2026.
This initiative follows a series of tax-related measures in Texas aimed at reducing the tax burden on residents. Notably, Governor Abbott recently signed a $10 billion property tax relief package into law, which includes increasing the homestead exemption for school district taxes and providing larger exemptions for seniors and disabled Texans. These measures are also subject to voter approval in the upcoming November election.
As the election approaches, both supporters and opponents of the capital gains tax amendment are expected to engage in campaigns to sway public opinion. Voter turnout and public sentiment will ultimately determine whether Texas enshrines this tax policy into its constitution, potentially setting a precedent for other states considering similar measures.
