Washington Democrats Advance Near‑10% Tax on Million‑Dollar Earners
An Associated Press report details how Washington state lawmakers are moving a nearly 10 percent annual tax on personal earnings over $1 million toward the governor’s desk this week, part of a broader push in blue states to raise taxes on the ultra‑rich. The Washington House has passed the measure after an all‑night session, sending it back to the Democratic‑controlled Senate just days before adjournment; Democratic Gov. Bob Ferguson has signaled he will sign it if it reaches him. Supporters, including House Majority Leader Joe Fitzgibbon, frame the bill as a way to fix what they call Washington’s "extremely regressive" tax system and say the new revenue would fund free K–12 school meals, expanded child‑care services, a family tax credit, and elimination of the sales tax on personal care items such as shampoo. Opponents, including Republican legislators and millionaire business owner Colin Hathaway, warn that layering this tax on top of the state’s new capital‑gains tax will treat reinvested business profits as personal income and could drive entrepreneurs and companies out of the state, setting up likely court challenges and a possible referendum. The story places Washington’s fight in the context of recent millionaire‑tax moves in Massachusetts, California, Maryland, Minnesota and New Jersey, as progressive activists like Patriotic Millionaires argue online that rising inequality justifies higher top‑end taxes while business groups warn of capital flight and legal uncertainty.
📌 Key Facts
- Washington’s House of Representatives passed a bill this week imposing a roughly 10% annual tax on personal earnings over $1 million, after an all‑night debate.
- The proposal would use the new revenue to fund free K–12 school meals, child‑care services, a family tax credit, and removal of sales tax on personal care products such as shampoo.
- Democratic Gov. Bob Ferguson has indicated he supports the measure if it reaches his desk before the Legislature adjourns Thursday, while Republicans and some business owners say the tax could push high‑income residents and companies to leave the state and is likely to be challenged in court and at the ballot box.
📊 Relevant Data
In Washington state, the tax system is regressive, with the lowest-income households paying 15.7% of their income in total excise and property taxes, compared to 3.0% for the highest-income households.
Key Conclusions from the Evaluation of the Current Washington Tax Structure — Washington State Department of Revenue
To be among the top 1% of earners in Washington state, an individual needs to make at least $1 million per year, implying approximately 1% of the population earns above this threshold.
How much you need to make to be in Washington's top 1% — Axios
In Washington state, Asian households have the highest median household income at $118,467, while Black households have a median of $69,308 and American Indian and Alaska Native households have the lowest at $62,114.
Washington Median Household Income By Race — Neilsberg Research
In Seattle, the racial income gap is among the widest in major U.S. cities, with the median income for Asian-headed households being about $77,700 higher than for Black-headed households in 2024.
Seattle's racial income gap among the widest, new census data shows — The Seattle Times
A study of California's 2012 tax increase on high earners found it drove an extra 0.8% of top earners to leave the state in the year after implementation.
Would a wealth tax actually drive the rich out of California? — CalMatters
📊 Analysis & Commentary (1)
"An opinion piece arguing that policies like Washington’s near‑10% millionaire tax are prompting the propertied class to realign politically toward the GOP, warning Democrats that aggressive tax and regulatory moves risk building a well‑funded elite opposition and that the party needs a strategic recalibration."
📰 Source Timeline (1)
Follow how coverage of this story developed over time