Washington state is currently locked in a political showdown over its new “millionaire tax.” Signed into law this March, the policy imposes a 9.9% income tax on earnings over $1 million. Now, a ballot initiative headed for November—spearheaded by conservative groups—is trying to kill it before it fully settles into the state’s tax code.
The current tax landscape
Washington has historically relied on sales and property taxes rather than a traditional income tax. Economists often point out that this makes the state’s tax system regressive: low-income households spend a significantly higher percentage of their earnings on taxes compared to the ultra-wealthy. Supporters of the 9.9% tax, including state senate majority leader Jamie Pedersen, argue the move is a necessary step to align the state’s revenue with its progressive values, potentially raising $3.5 billion annually for healthcare and education.
The anti-tax pushback
Brian Heywood, a hedge fund executive and founder of the political action committee Let’s Go Washington, is the primary driver behind the repeal effort. Heywood argues the tax is a “slippery slope” and fears it will push high-net-worth individuals to flee the state, effectively killing the “golden goose” economy. While some business leaders agree, polling suggests the repeal initiative might struggle. A recent survey from research firm DHM found that 57% of Washington residents oppose repealing the tax.
Why it matters
If the tax is repealed, the state faces a massive $15 billion budget gap, forcing lawmakers to scramble for alternatives like hiking sales taxes. If it stays, the state may start phasing out other regressive taxes. Meanwhile, the legal drama is far from over—the state supreme court is set to hear a challenge to the tax’s constitutionality next year. It’s giving high-stakes energy, and the outcome will likely define Washington’s fiscal future for years to come.
