Gov. Inslee proposes ‘wealth tax’ to address multi-billion-dollar budget shortfall
Dec 17, 2024, 5:26 PM | Updated: 5:26 pm
Washington Gov. Jay Inslee delivers his annual State of the State address to a joint legislative session in the House chambers of the state Capitol, Jan. 9, 2024, in Olympia, Wash. (File photo: Lindsey Wasson, AP)
(File photo: Lindsey Wasson, AP)
Faced with a multi-billion-dollar budget shortfall over the next four years, outgoing Washington Governor Jay Inslee is proposing a new “wealth tax.”
His proposed budget includes a 1% annual tax on wealth above $100 million, as laid out in a Medium post from Inslee Tuesday. Inslee said that would generate about $10 billion over four years and affect about 3,400 residents.
During a press conference in Olympia Tuesday, the governor said this is about fairness.
“There’s no enemies in this drama,” he shared. “There’s no bad guys in this drama but there is a need in our state for basic fairness, for increased equity and reduction of massive poverty that we are unfortunately experiencing in this particular economy.”
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Inslee then went into further detail about his proposed tax.
“This wealth tax would put a modest 1% tax on the wealth of residents that exceeds $100 million so this tax would only be on the excess over $100 million,” he explained.
According to The Associated Press (AP), citing the Tax Foundation, a conservative-leaning policy organization, no other states — and only a few countries — have taxes structured the way Inslee is proposing.
Inslee also wants to raise taxes on businesses. His proposed business and occupation tax would hit about 20,000 companies with an annual income of more than $1 million. It includes a temporary 20% tax hike for the first year followed by a 10% increase starting in 2027.
“It would be on companies with annual income exceeding $1 million in certain tax categories,” he explained. “This is written in a way that the majority of businesses would not be impacted.”
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Washington, which does not have an income tax, is considered to have one of the most regressive tax systems in the country, meaning lower-income residents pay a larger share than richer ones, according to the AP.
The notion was confirmed in a chart in Inslee’s Medium post, from the Institute on Taxation and Economic Policy’s 2024 “Who Pays?” Report. The chart shows families who make less than $33,500 see 13.8% of their income go to taxes, while families who make over $878,400 only see 4.1% of their income go to taxes.
Chart showing percentage of family income paid in taxes. (Chart on Governor Inslee’s Medium blog via the Institute on Taxation and Economic Policy, 2024 “Who Pays?” Report)
Inslee’s spending plan also includes about $2 billion in cuts and savings. However, his 2025-2027 budget also includes $905 million for 5,000 additional affordable housing units and homelessness services, along with $7 million for 60 additional state law enforcement officers.
The AP reported Governor-elect Bob Ferguson recently told The Seattle Times he would not rule out tax increases to cover the budget shortfall.
Contributing: Aaron Granillo, KIRO Newsradio; Julia Dallas, MyNorthwest; The Associated Press
