On November 12, 2024, the Texas State Legislature introduced Senate Joint Resolution 18 (S.J.R. No. 18), a proposed constitutional amendment aimed at prohibiting the imposition of taxes on the realized or unrealized capital gains of individuals, families, estates, or trusts. This resolution, spearheaded by Senator Perry, seeks to amend Article VIII of the Texas Constitution by adding Section 24-b, which explicitly states that the legislature cannot impose such taxes, including those related to the sale or transfer of capital assets.

Key provisions of the bill clarify that while capital gains taxes are prohibited, it does not prevent the state from levying other forms of taxation, such as ad valorem taxes on property, sales taxes on retail goods and services, or use taxes on goods consumed in Texas. This distinction aims to reassure voters that essential revenue streams for the state will remain intact.

The resolution is set to be presented to voters in a statewide election scheduled for November 4, 2025. If passed, it would solidify Texas's stance against capital gains taxation, a move that proponents argue will encourage investment and economic growth within the state. Supporters of the bill highlight the potential for increased capital investment, which could lead to job creation and a more robust economy.

However, the proposal has sparked notable debate among lawmakers and economic experts. Critics argue that the absence of capital gains taxes could disproportionately benefit wealthier individuals and exacerbate income inequality. They contend that such a tax could provide necessary funding for public services and infrastructure, which are vital for the state's long-term growth and stability.

As discussions continue, the implications of S.J.R. No. 18 extend beyond immediate tax policy. Economists and political analysts are closely monitoring the resolution, as its passage could influence Texas's economic landscape and tax structure for years to come. The outcome of the upcoming election will be pivotal in determining whether Texas will maintain its current tax framework or shift towards a more progressive taxation model.