Washington state Democrats push for tax on millionaires
Add Axios as your preferred source to
see more of our stories on Google.
Illustration: Lindsey Bailey/Axios
A plan to tax millionaires in Washington state has won the support of top Democratic leaders and Gov. Bob Ferguson, setting up a fresh debate over a state income tax.
Why it matters: Washington is one of only nine states without an income tax — and taxing high earners would mark a fundamental shift in how the state raises revenue.
How it works: The plan supported by Ferguson would impose a 9.9% tax on income above $1 million per year. (The value of someone's home wouldn't count toward the threshold.)
- Ferguson estimates fewer than 0.5% of Washington residents would pay the tax, which he says would raise at least $3 billion per year.
Yes, but: The plan would not help resolve the state's immediate budget shortfall, since the tax would almost certainly face repeal efforts and legal challenges.
- Even if the millionaire's tax is upheld by the courts, the revenue wouldn't be realized until 2029, Ferguson told reporters last month — partly due to the need to set up new systems to collect it.
What they're saying: The idea is "to start shifting to make our tax system more fair," House Speaker Laurie Jinkins (D-Tacoma) said during a legislative preview panel on Friday.
- She said the state's current tax code is highly regressive, causing lower-income residents to pay a larger share of their income in taxes than the wealthy.
The other side: Republicans are concerned the tax on millionaires would ultimately affect a wider share of Washington residents.
- "It might be millionaires today, but it's going to be you and me tomorrow — and I think that's my real deep concern as the budget continues to grow," House Minority Leader Drew Stokesbary (R-Lake Tapps) said at a Seattle CityClub event last week.
Between the lines: Democrats say they'd use a portion of the millionaire tax revenue to reduce taxes for others — such as for low-income residents, small businesses, and potentially property owners.
- But the main proposals under discussion wouldn't direct all of the money toward tax relief.
What's next: Because the tax is tied to the state budget, lawmakers can debate it until the final days of the session, which is scheduled to end March 12.