WA income tax on millionaires: Lawmakers introduce long-awaited bill

Washington lawmakers introduced the long-awaited income tax on millionaires late Monday night, marking a historic step in the decades-long debate over how the state funds its government.

The bills, HB 2724 in the House and SB 6346 in the Senate, were filed late Monday, though the full text has not yet been published on the official legislative website. KIRO Newsradio was the first news organization to report on the contents of a working draft last week, providing the earliest detailed look at the proposal.

What the WA millionaire tax would do

According to the draft reviewed by KIRO Newsradio, the legislation would impose a 9.9% tax on individual income exceeding $1 million. The tax would not apply to the first $1 million someone earns — only income above that threshold would be taxed at the 9.9% rate.

Critically, the bill would override Initiative 2111, the legislature-approved measure that banned state and local income taxes in Washington. That initiative passed with bipartisan legislative support in 2024.

If the bill passes, it would not take effect until at least January 1, 2029. The delayed implementation reflects the time needed to build collection systems and the near-certainty of legal challenges in Washington courts.

Who is sponsoring the WA income tax bill?

Several prominent Democratic lawmakers have signed on as sponsors of the millionaire tax legislation.

Sponsors include Majority Leader Jamie Pedersen in the Senate and Majority Leader Joe Fitzgibbon in the House.

Republicans warn WA income tax threshold could drop

Republicans remain fiercely opposed to the Washington income tax proposal. GOP lawmakers warn that once the tax mechanism exists, future legislatures could lower the $1 million threshold to reach middle-class taxpayers.

“First it was ‘tax the billionaires,’ now it’s ‘tax the millionaires,’ and tomorrow it’ll be ‘tax the thousandaires,'” Representative Travis Couture said during a pre-session budget panel.

The $1 million standard deduction is set in statute, not the state constitution. That means a future legislature could lower it with a simple majority vote — no constitutional amendment, supermajority, or ballot measure required.

Legal challenges expected for WA millionaire tax

Washington’s constitution requires taxes to be applied uniformly. A 1933 state Supreme Court ruling blocked graduated income taxes for nine decades. However, a 2023 ruling upholding the state’s capital gains tax gave supporters hope that a direct income tax could survive legal challenge.

Governor Bob Ferguson has framed the tax as necessary to address a projected $12 billion to $16 billion budget shortfall while making Washington’s regressive tax system fairer.

Senate Majority Leader Jamie Pedersen has acknowledged there is no path to bipartisan support but believes Democrats have the votes to pass the legislation without Republican help.

Charlie Harger is the host of “Seattle’s Morning News” on KIRO Newsradio. You can read more of his stories and commentaries here. Follow Charlie on X and email him here. 

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