Halfway through the 2026 Washington Legislative Session, a proposal to impose an income tax on Washington’s wealthiest households cleared its first legislative hurdle on Monday.
The so-called Millionaires Tax, introduced by democratic legislators, would establish a 9.9% tax on annual income over $1 million. Sponsors of Senate Bill 6346 say it would generate about $3.5 billion each year. Most of that revenue would go into the state’s general fund and would be directed to K-12 education, early childhood learning, health care and other essential governmental services.
The bill passed in the Senate Ways and Means Committee on Monday, February 9 after it was revised to include more carve outs to benefit Washington state residents. The revision expanded the eligibility for the Working Families Tax Credit from a minimum age of 25 to 18, increased certain tax credits for small businesses, and dedicated more revenue to county public defense services.
Related: Local leaders discussed the need for public defense funding in a recent episode of the At Issue Podcast.
The vote came after lawmakers heard public testimony on the bill last week, when opponents argued that the bill would harm businesses and force people to move out of the state.
“Yes, this income tax would hit me personally, but like many in my position, I’ve got options,” Brian Heywood, a hedge fund manager and the founder of Let’s Go Washington, testified before lawmakers. In just the last two weeks, I’ve heard from directly or heard about over 50 couples who are in the process of or are soon to be changing their domicile out of this state.”
Jed Fowler, president of the HD Fowler Company — also a millionaire — testified in favor of the tax.
“It’s better to grow the pie than to fight about slicing it. I am willing to pay this tax. I should pay this tax. Others like me should pay this tax,” Fowler told lawmakers. “I want to be a part of a society that asks and creates a progressive revenue base to provide prosperity for all Washingtonians. A system like that provides more success for the business that I run than lowering my tax rate, me personally.”
Democrats say the proposed Millionaires Tax would impact an estimated 30,000 taxpayers, which is fewer than 1% of the state’s population. The bill now heads to the Senate Rules Committee for review and is expected to reach a vote before the full Senate within the next week. If it is passed by both houses of the legislature this session, collection of the tax would begin in 2029.
Related: Eastern Washington legislators shared their opinions on a Millionaires Tax on At Issue: The Olympia Agenda.
Gov. Bob Ferguson has previously said he supports a Millionaires Tax but wants to ensure enough of the revenue flows directly back to Washington residents. The governor has not made a statement on Monday’s bill revisions as of the publication of this article. The governor’s proposed supplemental operating budget does not include tax hikes but rather cuts and other measures to shore up what his office estimates is a $2.3 billion shortfall.
The 2026 Washington Legislative Session has officially reached its halfway point. The short 60-day session will end on March 12, which gives state lawmakers only 30 more days to pass legislation and a supplemental budget to shore up the deficit.