By Anthony Smith, The Seattle Medium
A proposed income tax on Washington’s wealthiest residents is expected to be a prominent topic at the upcoming legislative session, as Gov. Bob Ferguson and state lawmakers seek new ways to close the state’s budget gap.
According to Ferguson, the proposed “millionaire’s tax,” which would impose a 9.9% levy on annual incomes over $1 million, could generate an estimated $3.5 billion for the Washington Working Families Tax Credit, K-12 education, road repairs and other priorities.
“We have to have a significant portion of these funds go back to Washingtonians,” Ferguson said. “It can’t just be $3.5 billion that goes into a general fund.”
Opponents are skeptical that the tax would apply only to millionaires and warn that small-business owners and working-class residents could also be affected.
When asked about these concerns, Ferguson reiterated his stance.
“I don’t support an income tax on anyone making less than one million dollars,” Ferguson said, adding that exemptions would be in place to protect small-business owners from tax penalties.
Another concern raised by critics is the possibility that major employers such as Amazon and Boeing could relocate to other states in response to the tax.
Ferguson said he has heard those concerns but believes Washington state can thrive under a new tax structure, just as other states have.
“Forty-one states have an income tax,” Ferguson said. “I think people are ready for a change.”
To pass, the proposal would need a two-thirds majority vote in the Legislature. It would also likely undergo several revisions and could face legal challenges.
“There is a good chance that happens this year,” Ferguson said, when asked about the proposal’s chances of advancing through the Legislature.
Ferguson acknowledged that this proposal would not solve all of Washington’s budgetary problems but believes that the millionaire’s tax would be a step in the right direction.
“Continuing to get our budget situation under control is a priority for me,” Ferguson said.
If enacted, the millionaire’s tax would likely take effect in 2029 at the earliest.
