Governor Pulls Support For Income Tax Legislation
House and Senate Democratic leaders unveiled legislation adopting an income tax on gross annual earnings of one million dollars or more. At the same time, Gov. Bob Ferguson pulled his support.
BY BILL LUCIA | WASHINGTON STATE STANDARD
OLYMPIA — Washington Gov. Bob Ferguson and Democrats in the state Legislature are divided over how to use the expected revenue from a newly proposed income tax on higher earners.
Lead lawmakers in the House and Senate unveiled the legislation Tuesday.
It calls for a 9.9% tax on personal adjusted gross income over $1 million. Income below that level would not be subject to the tax. The levy would take effect Jan. 1, 2028, with first payments due in April 2029. Backers estimate the tax would raise about $3.5 billion a year, roughly equivalent to a little less than 10% of the state’s current annual operating budget.
Democratic lawmakers and the governor agree revenue from the proposed tax should go toward tax relief, both for individuals and businesses. But less than two hours before legislators rolled out their proposal Tuesday morning, Ferguson, who is also a Democrat, blasted out a statement saying he did not support the bill in its current form because it does not do enough on this front.
“I have repeatedly insisted that a significant percentage of the revenue generated by the Millionaire’s Tax must go back into the pockets of Washingtonians to make life more affordable,” the governor said. “This proposal does not come close.”
If enacted, Washington would shed its status as one of nine states without an income tax on personal wages and salaries.
Supporters see the bill as a step toward reengineering a state tax code that favors the rich and forces lower-income residents to pay an outsized share of their income in taxes and fees.
“We have a broken, upside-down tax system that we have been stuck with for 90 years. We have a generational opportunity in front of us to change that trajectory and to make the whole system fairer,” Senate Majority Leader Jamie Pedersen, D-Seattle, told reporters Tuesday.
