Governor Bob Ferguson has proposed a new millionaire tax proposal. This plan would introduce a 9.9% state income tax. The tax only applies to annual earnings above one million dollars. Supporters argue this measure promotes tax system fairness. Washington currently has no statewide income tax. The state relies heavily on sales and property taxes. Ferguson claims the current system unfairly burdens lower-income families. He states the lowest earners pay a much higher rate. Conversely, the wealthiest residents pay a significantly lower percentage. The governor aims to rebalance this unequal structure with his plan.
However, the millionaire tax proposal faces immediate and strong opposition. State GOP Chairman Jim Walsh leads the critical charge. He argues the tax could create a dangerous legal precedent. Therefore, Washington’s Supreme Court might find a targeted tax unconstitutional. Such a ruling could then allow a broader income tax. Democrats might subsequently tax all residents in the future. Walsh firmly insists the governor’s promises offer little reassurance. The public reportedly shares this deep skepticism about the plan.
Economic analysts also raise serious concerns about the millionaire tax proposal. The Tax Foundation examined the policy’s potential impact. They calculated a top combined rate exceeding eighteen percent. Furthermore, this rate would then lead the entire nation for high earners. The tax would primarily affect specific wealthy individuals. Targets include successful small business owners and tech employees. Many tech workers receive stock units as part of their compensation. Moreover, Washington state hosts nearly three hundred sixty thousand tech jobs. The state also counts almost seven hundred thousand small businesses.
A senior fellow at the foundation issued a stark warning. He said the aggressive tax would damage Washington’s economy. Jobs and economic opportunity would likely migrate elsewhere. Therefore, the state’s tech sector already faces high business taxes. This new income tax could prove the final burden for companies. Future expansions would probably occur in other states. Existing jobs might eventually follow this same path out. The policy risks harming the very economy it hopes to fund.
Governor Ferguson outlines specific uses for the new revenue. The funds would increase K-12 education spending substantially. Money would also eliminate certain sales taxes on essentials. Furthermore, these items include basic hygiene products and baby supplies. Affordable clothing items would also become sales tax free. The governor asserts these steps help working families directly. He wants to address the current affordability crisis effectively. His office did not provide additional comment for this story.
The debate now intensifies ahead of the 2026 legislative session. Proponents champion the tax as a tool for equity. However, they see it as a necessary correction for systemic imbalance. Opponents condemn it as a risky economic experiment. They fear it will drive wealth and talent from Washington. The millionaire tax proposal remains a deeply divisive issue. Its future will significantly impact Washington’s fiscal landscape. All sides now prepare for a fierce political battle.
