Looks Like Washington State Is About to OK a Millionaires Tax

Washington state's long-running fight over taxing the rich just cleared its biggest hurdle yet. The state Senate on Wednesday signed off on a new 9.9% tax on annual income above $1 million, sending the bill to Gov. Bob Ferguson, who says he plans to sign it, reports the Seattle Times. The tax, set to start generating revenue in 2029, is projected to bring in $3 billion to $4 billion a year for the general fund, which pays for K-12 education, higher ed, and human services. A slice would be earmarked for child care and early learning, and House-added tweaks include a commitment to free school lunches for public K-12 students.

The measure also scraps sales tax on diapers, OTC meds, and basic hygiene items; broadens small-business tax exemptions; and expands the Working Families Tax Credit to an estimated 460,000 more households. The new income tax would affect between 20,000 and 30,000 households, per the New York Times and KOMO. The bill passed the Senate 27-21, largely along party lines, after an earlier heated House debate that lasted 24 hours. That chamber gave its thumbs-up to the tax on Tuesday, with a 51-46 vote.

Democrats cast it as a "millionaires tax" that improves equity and funds schools; Republicans warn it will eventually spread beyond high earners and spur wealthy residents to leave, much like ex-Starbucks CEO Howard Schultz recently announced he's ditching the Evergreen State and headed to Florida, per the Seattle Times. Opponents are already preparing lawsuits and possible ballot measures to try to kill it before it takes effect.