Washington State Lawmakers Approve ‘Millionaire’s Tax’ – First Income Tax In State History
On March 12, 2026, Washington state lawmakers passed a historic income tax bill that will impose a 9.9% tax on individuals earning more than $1 million annually. This is the state’s first-ever income tax, a significant shift in a state that has traditionally not taxed income. The bill passed through the Democrat-controlled Senate on Wednesday night and will fund critical areas such as education, prisons, universal school lunches, and offset other taxes.
The legislation now heads to Governor Bob Ferguson, who has already pledged to sign it into law. Democratic leaders, including House Majority Leader Joe Fitzgibbon, expressed that public frustration over federal tax policies and budget cuts helped build momentum for the bill’s approval.
Although Washington has long resisted an income tax, a recent poll showed increasing public support, especially following challenges from federal tax cuts and state budget difficulties. Fitzgibbon told POLITICO that the state’s fiscal problems and public sentiment created a strong case for the tax.
However, Republicans sharply criticized the bill, arguing it would not solve Washington’s budget issues and could prompt major companies, like T-Mobile and Starbucks, to leave the state. A number of Democrats also voted against the bill, reflecting concerns about its potential impact on the state’s economy.
Despite these concerns, the bill faces further hurdles. Fitzgibbon anticipates a ballot initiative to repeal the tax in November, and legal challenges are already being prepared. Critics argue that the tax could conflict with Washington’s constitution, which prohibits property from being taxed at different rates. Fitzgibbon has suggested that the state courts should review whether income should be classified as property under the law.
If signed into law, this bill will mark a transformative shift in Washington’s tax landscape, setting the stage for possible national discussions on similar income tax proposals.
