On the Washington State House floor, over 24 hours of bickering and endless filibustering targeted Senate Bill 6346, the controversial bill known as the “Millionaires’ Tax.” This bill seeks to impose a 9.9% levy on households with income above $1 million a year. Falling mostly along party lines, state Republicans vehemently opposed the bill, arguing a wealth exodus of millionaires leaving to other states would occur, greatly reducing the tax generated. Moreover, economic growth from key economic powerhouses within the state, such as Starbucks and Boeing, would dissipate, further stripping away these key household names in Washington.
Many state Republicans saw this day as a form of fiscal suicide. Matt Marshall, a Republican state representative from Eatonville said “We have lost the trust of the people. This is a dark day in Washington’s history,” on the Washington State Standard. Despite the fears of state Republicans, on March 30, 2026, Washington Governor Bob Ferguson, a Democrat, signed the bill into law at a ceremony in Olympia.
“Adoption of the historic Millionaires’ Tax makes our tax system more fair, and means free meals for K-12 students, the largest tax break in state history for small businesses, eliminating the sales tax for baby diapers, and sending a check to nearly 500,000 working families to make life more affordable,” Ferguson said at the ceremony. Explaining further on what this tax entails, the Millionaires’ Tax impacts an estimated 30,000 households, generating at least four billion in tax revenue each year, The New York Times reported. As the Washington state legislature toes the line on a budget deficit, the additional revenue would support core government services for the state and allow investment into systemic problems for working families. Clearly, the lackluster tax revenue spurred state Democrats to entrench themselves in establishing a change for the state’s tax structure.
Economists rank the state’s tax system as among the most regressive in the country, according to the Tacoma News Tribune. According to Investopedia, regressive tax systems function based on applying taxes uniformly regardless of income. To illustrate, in Washington state, sales tax for baby diapers disproportionally affects those with lower incomes by taking a larger share of their earnings. Unlike most states, Washington’s lack of income tax forces the state to rely heavily on sales tax. From the Washington State Fiscal Information, almost 50% of taxes generated came from retail sales and use tax. From this, the controversy of Washington’s state tax code creates claims that it fails to acknowledge different income levels.
Proponents of the Millionaires’ Tax argue this upside-down tax code fails to make Washington millionaires pay their fair share of taxes; others say Washington tax code formed from an agricultural-based economy, outdated for a state that transformed into a service-based economy in which it needs to help the state’s poorest residents. Rick Steves, an Edmonds-based writer and millionaire wrote in an op-ed at My Edmonds News, “After year of receiving a Bush-era tax break for the wealthy that I didn’t need — I noticed that to pay for that tax cut, public funding for community programs and institutions was being decimated.” Additionally, an op-ed on The Olympian by Rachael Myers and Emma Scalzo, both part of organizations intended to help working families, argue the Washington’s tax system became obsolete through the state’s economic shift from agriculture to service, ignoring issues like affordable housing and homelessness services. “People become homeless in different ways, but they remain homeless for one primary reason … it is the direct outcome of an upside-down tax code that leaves our state without the resources to build and preserve affordable housing at the scale this crisis demands to provide the support and services people need to thrive in those homes,” they wrote. While many in favor of this law celebrate the makeover of turning Washington’s tax code into a more progressive tax system, that strives to make high income earners make them pay their fair share; challenges lie ahead for this law.
Washington state’s lack of income tax stems from the definition of property in the state’s constitution. In a 1933 state Supreme Court case, it was ruled that income is considered property under the state constitution, making income tax unconstitutional as it infringed on property. This quickly motivated multiple groups to challenge the Millionaires’ Tax. Former state Attorney General Rob McKeena said this law is unconstitutional. “Washington’s constitution is clear … income taxes are unconstitutional under existing law,” reported by the Washington State Standard. In addition, popularity seems to follow under the side of no income tax as Washington voters have rejected income tax measures at the ballot box ten separate times.
An op-ed from the editorial board on Wall Street Journal, “Washington State’s Income Tax Con,” claims the Millionaires’ Tax functions as a hidden crowbar to slowly lower the threshold, encroaching on middle-class Washingtonians as politicians demand even higher taxes. “Spending soars with the new revenue, and politicians demand even higher taxes … And Democrats claim Donald Trump is the threat to democracy,” the editorial board wrote. The income tax would begin generating revenue in 2029; however, uncertainty exists for the future of the Millionaires’ Tax as it faces legal challenges, and direct opposition that puts the tax in jeopardy.
KUOW reported that the Washington’s Supreme Court has agreed to weigh in on the constitutionality of the law, examining the “necessity clause” that prevents a voter referendum from interfering with the tax.
From fierce debates to legal hurdles to impede the tax, figuring out whether ‘millionaire migration’ occurs under a progressive tax system requires finding several variables that make it difficult to solve. “There’s a lot of different factors to go into it … someone who moves who is affected by the millionaires’ tax could say, ‘Oh, well, maybe they moved because of the millionaires’ tax,’ but maybe it’s something they were already considering because of various other factors either employment opportunities or even family concerns,” Economics Association Vice-President at UW Bothell, Thomas Purchas said.
Between balancing generating revenue for the government and incentivizing individuals to work, many policymakers and lawmakers fear taking the risk to tax their wealthy residents, given their ability to easily move to other states with no income tax such as Texas or Florida. “Rich people have the mobility to move around … it’s hard to tax the rich,” Economics Association President at UW Bothell, Eren Asmaz said. Whatever the future holds for the Millionaires’ Tax, it is clear the debate whether to tax wealthy individuals will continue within Washington State and the rest of the United States.
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