Washington state’s newly enacted millionaire tax faces a ballot repeal effort set for November, marking a significant test of the state’s shift toward progressive taxation. The 9.9% income tax on earnings exceeding $1 million was signed into law earlier this year and is projected to raise approximately $3.5 billion annually for education, healthcare, and tax credits. A coalition of advocacy groups and unions backing the tax argue it would affect only the state’s approximately 20,000 highest earners.
Conservatives opposing the measure, led by hedge fund executive Brian Heywood through his political action committee Let’s Go Washington, contend the tax represents a slippery slope that could eventually extend to lower-earning households. Heywood relocated his business from California to Washington in 2010, partly attracted by the state’s historical lack of income taxation. He has spent at least $11 million of his own funds on multiple ballot initiatives since 2022. Supporters of the tax argue it aligns Washington’s historically regressive tax structure with the state’s progressive values, noting that residents in the lowest-earning quintile currently spend up to 13.8% of their income on state taxes compared to approximately 4% for the top 1%.
Washington’s tax debate extends back decades. A 1930s state supreme court ruling classified income taxes as property taxes, limiting diversification. A 2002 commission led by Bill Gates Sr. concluded Washington’s tax code was uniquely regressive, yet voters rejected a proposed millionaire tax in 2010, supported by major opposition funding from figures including then-Microsoft CEO Steve Ballmer and Amazon founder Jeff Bezos. By 2021, lawmakers passed a capital gains tax that survived legal challenges and a 2024 ballot initiative.
Governor Bob Ferguson has indicated he would veto any effort to expand the millionaire tax to lower-earning households. The measure reflects broader national trends, with Massachusetts, Maine, New York, and Hawaii implementing similar taxes on high earners. Academic research suggests approximately 2% of affected residents might relocate due to the tax, according to an Economic Opportunity Institute analyst.
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