Washington state is on the verge of a historic tax overhaul. Governor Bob Ferguson announced he would sign the latest version of the millionaires tax bill currently moving through the state House, calling the revised legislation a meaningful step toward making life more affordable for Washington residents. The development marks a turning point in a months-long debate over whether the state should become the first in decades to establish a new income tax on its wealthiest residents.
The proposal would impose a 9.9% tax on Washington residents earning more than $1 million annually, beginning January 1, 2028, and is projected to generate roughly $3 billion per year starting in 2029. For a state that has long relied on a regressive sales tax system, this legislation represents nothing short of a generational shift in how Washington funds its public services.
Think this tax is overdue — or overreach? Share your take in the comments below.
How the Bill Got Here
The path to this moment was far from smooth. Ferguson had previously expressed hesitation, making clear that any bill reaching his desk had to do more than simply tax the wealthy — it had to put real money back into the hands of ordinary Washingtonians. He outlined specific conditions, including significant small business tax relief and a meaningful expansion of the state’s Working Families Tax Credit.
Those demands set the stage for a round of intense negotiations between lawmakers and the governor’s office, ultimately pushing sponsors to rework key provisions of the original Senate-passed bill.
What Changed: The Revised Amendment
The breakthrough came when a sweeping floor amendment was introduced in the House. The revised version expands eligibility for the Working Families Tax Credit, now reaching hundreds of thousands of additional households, providing qualifying families with checks ranging from $300 to $1,300. It also reduces the tax burden on small business owners — a sticking point Ferguson had flagged early on.
Additional changes directed revenue toward free school breakfast and lunch programs, expanded child care funding, and a sales tax exemption on over-the-counter medications. The updated bill also dedicates a portion of its revenue to early learning programs and retains provisions eliminating sales taxes on household essentials like diapers and hygiene products.
Ferguson responded warmly. He stated publicly that the latest amendment achieved his critical goals and that he would sign the bill into law.
Who Pays — and Who Benefits
The millionaires tax applies only to income earned above $1 million in a single year — not to people whose net worth crosses that threshold through home equity or investments alone. Fewer than half of one percent of Washington residents would ever pay it.
Washington has long ranked near the bottom nationally for tax fairness. Families in the lowest income brackets pay a significantly higher share of their earnings in state and local taxes than the wealthiest residents do. Supporters of the bill argue the new levy is a necessary correction to a system that has burdened low- and middle-income workers for generations.
The projected $3 billion in annual revenue would fund an array of programs targeting affordability — a central theme of Ferguson’s first year in office.
Republican Opposition and Legal Challenges
Not everyone is on board. Republican lawmakers have been vocal in their opposition, raising both constitutional and political objections. Senate Republican leaders pointed out that Washington voters have rejected income tax proposals more than ten times over the decades, arguing the governor’s support ignores a long-standing public verdict.
Republican lawmakers called the bill unconstitutional, unnecessary, and unpopular, urging colleagues to focus on reducing state spending rather than creating new tax structures. A legal challenge is widely expected the moment the bill is signed into law.
Ferguson, a former three-term state attorney general, has said he is confident courts would uphold the new tax — even though the state Supreme Court has previously ruled that income taxes are unconstitutional under Washington’s constitution. The legal battle ahead is expected to be lengthy and consequential.
The Legislative Clock Is Ticking
The millionaires tax passed the state Senate by a vote of 27–22 and moved to the House for consideration. After a House vote, the bill would require a concurrence vote in the Senate before heading to the governor’s desk. The deadline to pass the bill before the legislative session closes is mid-March.
House sponsors expressed strong confidence the votes were there to push it through both chambers in time.
A Moment Decades in the Making
Washington state has not had a meaningful income tax in nearly a century. A high-profile proposal in 2010 targeting top earners failed at the ballot box with nearly two-thirds of voters opposed. Even in recent years, Democratic lawmakers were reluctant to push the issue, with some going so far as to pass a ban on income taxes to avoid voter backlash.
The political climate has shifted. In the 2025 elections, Democrats who backed tax increases won re-election despite heavy spending against them, suggesting the public appetite for a fairer tax structure may be greater than many assumed.
Ferguson has been direct about what he sees as the broader stakes. Progressive tax reform, in his view, cannot mean simply asking more from those at the top. The gains must flow directly back to working families and small business owners who have struggled under the weight of the affordability crisis.
Whether courts ultimately allow this tax to stand remains an open question. But for now, Washington appears ready to take a step that politicians have avoided for generations — and the governor is ready to make it official.
Will the WA millionaires tax survive the courts and deliver real relief to working families — or is a legal battle about to undo everything? Drop your thoughts in the comments and keep following this story as it unfolds.
