'Inspiring': Washington Enacts Millionaires' Tax to Help Working Families

While nearby California prepares for a November vote to tax the ultrarich, Democratic Washington Gov. Bob Ferguson on Monday signed state legislation that creates a tax on income over $1 million in a single year.

"Adoption of the historic Millionaires' Tax makes our tax system more fair, and means free meals for K-12 students, the largest tax break in state history for small businesses, eliminating the sales tax for baby diapers, and sending a check to nearly 500,000 working families to make life more affordable," Ferguson highlighted in a statement.

Senate Bill 6346, sponsored by state Sen. Jamie Pedersen (D-43), was delivered to the governor earlier this month after passing the upper chamber 27-21. In the Washington House of Representatives, where the companion bill was led by Rep. Joe Fitzgibbon (D-34), it was approved 51-46.

"With this bill, we're going to begin to right a historic wrong that has plagued our state for nearly 100 years, and made our tax system one of the worst and most regressive in the entire country," said Pedersen. "We've asked Washington's working families for far too long to shoulder far too much of the tax burden for the things we care about, and we have not asked enough of our wealthiest neighbors. The Millionaires' Tax represents hope and change for people in communities like mine, and across the state."

Bloomberg reported Monday that before adopting the law, which "applies a 9.9% levy on the roughly 30,000 taxpayers in the state who make more than $1 million a year," Washington was one of just nine states without an income tax

Washington lawmakers previously "made progress in recent years by creating and later enhancing their capital gains excise tax," but its "tax structure has been woefully unequal, ranking as the second-most regressive state and local tax system in the country," according to the Institute on Taxation and Economic Policy (ITEP).

"Inequality is at a historic high and billionaires are walking away with ever-larger shares of our country’s collective wealth," ITEP executive director Amy Hanauer said in a Monday statement. "With those in charge at the federal level passing policies that only make this worse, it is incumbent upon states to come up with solutions. It is inspiring to see Washington listening to the demands of the people to create a less regressive state tax system."

Last year, congressional Republicans and President Donald Trump used the GOP's narrow majorities to pass a budget package, the One Big Beautiful Bill Act, that provided the rich with more tax breaks while slashing programs for working families, such as Medicaid and the Supplemental Nutrition Assistance Program (SNAP).

Ferguson signed Washington's bill as Republicans in Congress prepare for this year's budget package, which they aim to pass ahead of the November midterm elections, and other states and localities consider measures to tax the rich and use the revenue to better serve the working class.

As historian Lawrence Wittner detailed in an opinion piece for Common Dreams last week, "Campaigns for state tax-the-rich legislation are flourishing in California, Colorado, New York, Oregon, Rhode Island, Texas, and Virginia, and have already succeeded in getting such legislation adopted in Massachusetts and Washington."

US Sen. Bernie Sanders (I-Vt.) headed to New York City on Sunday to boost an effort by NYC's newly elected mayor, Zohran Mamdani, to pressure Democratic Gov. Kathy Hochul to raise taxes on the rich. He addressed a rally at Lehman College in the Bronx.

"The people of the city, the people of this state, the people of this country, they do not want to see our kids go hungry," Sanders said. "They do not want people to sleep out on the street or lack healthcare. They want the very rich to start paying their fair share of taxes."

At the federal level, Sanders and Rep. Ro Khanna (D-Calif.) earlier this month introduced the Make Billionaires Pay Their Fair Share Act. They were followed last week by Sen. Elizabeth Warren (D-Mass.) and Reps. Pramila Jayapal (D-Wash.) and Brendan Boyle (D-Pa.), lead sponsors of the Ultra-Millionaire Tax Act. However, neither bill is expected to get through the current Congress.

Like in Washington, DC, efforts to tax the rich are still facing pushback in Washington state. After Ferguson's signature, Citizen Action Defense Fund announced its intention to sue, with executive director Jackson Maynard declaring that "since lawmakers and the governor have chosen to ignore both the constitution and decades of settled case law, we will act."

According to KUOW, during the bill signing event in Olympia that featured remarks from not only the governor but also the bill sponsors, a small business owner, and a tech executive, Ferguson acknowledged that "there's going to be a public conversation around this in the days and weeks and months ahead, as there should be of something of this historic nature."

"Putting front and center those perspectives you just heard, I think, will be critical," he asserted, "because when Washingtonians hear the benefits that flow to working families, to businesses large and small, to kids in schools with those free meals, for childcare services for thousands of Washington families, it's going to make a huge, huge difference."