Washington State Lawmakers Weigh ‘Millionaire Tax’ Amidst Public Debate
– OLYMPIA, Wash. – A proposed 9.9% income tax on Washington state residents earning over $1 million annually is sparking intense debate, as lawmakers heard public testimony on Senate Bill 6346 Friday. The legislation, introduced by Democratic legislators on Tuesday, aims to generate an estimated $3.7 billion in annual revenue, potentially reshaping the state’s tax structure.
The hearing before the Senate Ways and Means Committee drew a large crowd, with both supporters and opponents eager to voice their opinions. Proponents argue the tax is a necessary correction to Washington’s current tax system, which they contend disproportionately burdens working-class residents. “For too long Washington has over relied on working class people, while giving the wealthiest a special deal,” said Eli Taylor Goss, with the Washington State Budget and Policy Center, according to reporting by King 5.
However, opponents warn the tax could negatively impact businesses. Michele Willms, with the Associated General Contractors of Washington, argued the bill isn’t solely a tax on millionaires. “This bill is described as a tax on millionaires but in reality, it is a tax on businesses, LLCs, partnerships, and S corps,” she reportedly stated.
The proposed legislation extends beyond just the income tax itself. It also includes provisions to reduce certain taxes on small businesses, eliminate sales tax on hygiene products, and expand the Working Families Tax Credit – a tax refund for low-income residents. Five percent of the revenue generated from the tax would be allocated to public defense services for counties.
The debate over the “millionaire tax” comes as Washington remains one of nine states without a personal income tax. The proposal calls for the 9.9% tax on personal adjusted gross income over $1 million, with the tax taking effect January 1, 2028, and first payments due in April 2029. The Washington State Standard reports that backers estimate the tax would raise about $3.5 billion a year.
Adding another layer of complexity, Washington Governor Bob Ferguson has expressed reservations about the current form of the bill. While he agrees with the need for revenue and tax relief, Ferguson stated he doesn’t believe the proposal goes far enough in returning funds to Washingtonians to address affordability concerns. According to the Washington State Standard, Ferguson said, “I have repeatedly insisted that a significant percentage of the revenue generated by the Millionaire’s Tax must go back into the pockets of Washingtonians to make life more affordable. This proposal does not come close.”
Despite concerns from the Governor, some business leaders publicly support the tax. Jed Fowler, president of construction supply company HD Fowler, testified Friday that he would be subject to the tax and is willing to pay it. “Investing in our communities is fundamentally pro-business. A business can only be as strong as the community it serves,” he told members of the state Senate Ways and Means Committee, as reported by MyNorthwest. Fowler further stated, “It’s better to grow the pie than to fight about slicing it.”
In a surprising exchange during the hearing, Republican State Senator Chris Gildon challenged Fowler, asking why he didn’t simply pay the equivalent amount voluntarily. Fowler responded that he wants to be part of a system that creates a progressive revenue base to provide prosperity for all Washingtonians, arguing such a system ultimately benefits businesses like his.
Not all business owners share Fowler’s perspective. Brent Frei, founder of the agricultural technology company TerraClear, voiced opposition to the bill, stating that his successful businesses thrived because of the hard work and ownership stake of his employees. MyNorthwest reported that Frei believes the conditions that allowed his companies to succeed would be jeopardized by the proposed tax.
The debate over the millionaire tax is expected to continue as lawmakers work to refine the legislation and address concerns raised by both supporters and opponents. The outcome will likely have significant implications for Washington’s tax landscape and its approach to funding state programs and services.
