Voters on Election Day approved three amendments banning taxes on capital gains, estates or inheritances, and certain securities transactions — measures that ensure the Lone Star State’s low-tax structure is here to stay.
According to FOX Business, Carliss Chatman, a law professor at Southern Methodist University’s Dedman School of Law, said in a statement that the votes “make it clear that Texas’s low-tax structure isn’t just policy, it’s now permanent.”
“Whereas other states try to lure an Amazon or Facebook with temporary tax breaks or incentives, Texas doesn’t have to because we would never charge those taxes anyway,” Chatman said. “The incentives here are permanent, and now it’s unconstitutional for the state to start taxing you.”
The amendments include:
Capital gains tax ban: Prevents Texas from ever taxing profits from the sale of investments, real estate, or other assets.
Securities transaction tax ban: Blocks the state from taxing financial trades or payroll transactions.
Estate and inheritance tax ban: Prohibits future taxes on wealth transfers after death.
Texas leaders say the move strengthens the state’s appeal to businesses and investors. More than 200 companies have relocated their headquarters to Texas since the COVID-19 pandemic, including Caterpillar, Chevron, Hewlett-Packard Enterprises, and Oracle.
Critics, however, argue the new restrictions could tie the hands of future legislatures, especially during economic downturns, forcing greater reliance on property and sales taxes that hit working families harder.
Supporters counter that Texas’s booming economy — now the eighth-largest in the world — provides ample revenue without such taxes, pointing to a budget surplus and strong job growth.
The timing also aligns with the upcoming launch of the Texas Stock Exchange (TXSE), which recently received SEC approval and plans to open in Dallas in 2026. The exchange aims to compete with the New York Stock Exchange and Nasdaq by providing a more affordable and business-friendly environment.
Meanwhile, other states are moving in the opposite direction. California is considering a 5% wealth tax on high-net-worth residents to fund Medicaid — a stark contrast to Texas’s approach.
With these amendments now enshrined in its constitution, Texas has sent a clear message to investors and entrepreneurs alike: the low-tax, pro-business model isn’t just policy anymore — it’s permanent.
