Washington's income tax on millionaires survives repeal vote
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An election worker opens ballots at the King County Elections headquarters on Oct. 23. Photo: David Ryder/Getty Images
Washington voters have shot down an effort to repeal the state's new income tax, the Associated Press reports.
Why it matters: The failure of the repeal measure, Initiative 645, means the state's tax on annual incomes over $1 million will stay in place — unless opponents succeed at overturning it in court.
By the numbers: I-645 was losing with 57.6% of Washington voters opposed as of Thursday night, according to the Washington secretary of state's office.
The Associated Press projected the measure had failed Thursday evening, after a third day of vote counting.
Catch up quick: Washington has long been one of nine states that doesn't tax earned income.
- But earlier this year, the Democratic-controlled Legislature passed an income tax targeting the state's wealthiest households.
- The 9.9% tax, which supporters have dubbed the "millionaires tax," is set to take effect in 2028.
- It will affect individuals and couples who make more than $1 million per year — an estimated 25,000 taxpayers.
The tax will only apply to the portion of annual income that exceeds $1 million, a threshold that is set to rise with inflation.
What they're saying: "These election results are a definitive statement from the voters of Washington that they support making our tax code more fair, and that they reject cuts to education, health care, and child care," Erik Houser, a spokesperson for the No on 645 campaign, said in a news release.
The other side: Let's Go Washington, the conservative committee backing I-645, predicted that the income tax will hurt the state economy.
- The group sent a news release Thursday calling the tax a "continuous cash grab" by Washington Gov. Bob Ferguson.
- "We remain deeply concerned about the precedent this sets; we're confident that Bob Ferguson will expand his income tax to more Washington families," Brian Heywood, Let's Go Washington's founder, said in the news release.
State of play: Now that the tax has survived the ballot box, it faces another test in the courts.
- Tax opponents have filed a lawsuit seeking to overturn it, arguing it violates the state constitution.
- A 1933 state Supreme Court ruling found that income is property, which Washington's constitution says must be taxed at a uniform rate.
- Democratic legislative leaders who backed the income tax law have been counting on the court revisiting that 1933 ruling — and possibly overturning it.
What's next: The state Supreme Court is expected to decide the issue sometime before the first income tax payments are due in 2029.
Editor's note: This story has been updated throughout.