OLYMPIA, Wash. — Washington state is considering a new proposal to implement a 9.9% income tax on individuals earning more than $1 million per year.
The measure, which would be the first state income tax in nearly 100 years, is projected to generate $4 billion in annual revenue.
The majority of the revenue would go into the general fund and be put into essential services.
The proposal has sparked debate among state leaders regarding economic competitiveness and taxpayer relief. While a 2025 independent poll by Portland-based DHM Research indicates 61% of residents support the tax, while 29% are opposed and 10% of respondents are uncertain.
Gov. Bob Ferguson has stated he will only fully support the bill if more of the revenue is returned to working families.
Washington Democrats have advocated for the bill as a tool “to make life more affordable for working families and promoting our state’s economic competitiveness.”
Gov. Ferguson has expressed alignment with much of the bill, but is calling for specific adjustments to benefit residents.
“A significant percentage of these revenues must go back into the pocket of Washingtonians,” Ferguson said, adding that not enough is currently allocated to tax relief for working families.
“That is new dollars back in pockets of Washingtonians,” Ferguson said. “That totals about $230 million, if my math is right, or about 7% of the total revenue that we’d be receiving.”
A spokesperson for the Democratic Caucus told KIRO 7 News that the tax relief they have estimated from this proposal differs greatly from the governor’s, stating the Dept. of Revenue projects 18% would be go to tax relief versus the governor’s estimated 7%.
Republican lawmakers have raised concerns about the long-term implications of introducing an income tax.
Sen. John Braun, a Republican, argued that the million-dollar threshold is a branding effort that could lead to broader taxation in the future.
“It happens to have a higher limit right now, but there’s no reason that limit won’t change in the future and that’s exactly what we’ve seen in states that have put an income tax in place in the last couple decades,” Braun said. “They start at one rate and then lower and expand it to everyone.”
Rep. Jim Walsh, also a Republican, suggested the tax could discourage major corporations and entrepreneurs from remaining in or moving to the state.
Walsh expressed concern that Washington could lose its competitive edge to states with no income tax.
“It’s not so much that we’ll lose Microsoft or Amazon or Boeing, although we might,” Walsh said. “It’s that the next Amazon isn’t going to be in Seattle. It’s going to be Austin, Texas or Orlando, Fla. That’s what we have to protect against.”
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