Washington joined the ranks of states like Rhode Island, Massachusetts, and Maine in enacting a so-called millionaires tax. It places a 9.9% levy on households earning more than $1 million per year. The tax doesn’t apply to the first $1 million of income — only the income beyond that threshold.
Supporters of the tax argue that it affects only a sliver of households in the state, while opponents warn it threatens opening the door to a broader statewide income tax.
Let’s Go Washington, a political action committee sponsored by hedge fund manager Brian Heywood, put forward the repeal measure. “We are proud to lead the fight to protect families and small businesses from Olympia expanding their state income tax on all Washingtonians,” he said in a statement July 15, when its initiative met the signature threshold for appearing on the ballot.
Meanwhile, a campaign urging voters to reject the repeal bid has won the backing of some high-profile Washingtonians, including travel writer Rick Steves and “Jeopardy!” winner-turned-host Ken Jennings.
Gov. Bob Ferguson (D) signed the bill creating the tax in March. It takes effect in 2028, with the first taxes due in 2029.
I'm curious how they're going to square it with our state constitution's restrictions on income tax.
Our taxes are already extremely regressive here. I'm not sure why people are freaking out over this income tax being applied to middle and low income households when they're already taxed more than rich households.
There's technically no constitutional restriction on income tax, per se. The 1933 ruling in Culliton v Chase held that income is property, and the state constitution doesn't allow graduated taxes on property. Meaning any income tax would have to be a flat rate (regressive). We're trying to get around that, and the ruling that income is property could be overturned.
It would be nice if we could have a tax system in this state that doesn't punish poor people for being poor.
It would be SO nice!
Thanks for explaining the income tax limitations in more detail. That makes sense!
Sure thing! For some more info: the reason they're more confident about overturning that ruling now is that the 2023 ruling on the capital gains tax said that it's an excise tax on a transaction, not a tax on property.
I'm not really freaking out because Ferguson said he would veto anything that goes below $1M. And he's already on thin ice with most voters.
What I'm worried about and this seems to be what most supporters of this initiative are pointing out is that there were amendments proposed to make sure the tax never gets lowered or it would adjust with inflation, etc. but they were shutdown very quickly.
MAGAs like Heywood wouldn't have any standing if that language was in there.
Sorry, I wasn't trying to imply that you were freaking out. I was referring more to some of my conservative coworkers that had very interesting fits about this haha.