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By Aliss Higham
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Washington Governor Bob Ferguson has endorsed an income tax on millionaires, backing a proposal from legislative Democrats that would levy a 9.9 percent tax on annual adjusted incomes above $1 million.
Why It Matters
Washington is currently grappling with a $2.3 billion budget deficit and rising cost pressures tied to the federal government, according to the governor. Speaking at a news conference Tuesday, Ferguson framed the proposal as part of a broader effort to address the state’s fiscal and affordability issues.
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On the same day, he also unveiled a spending proposal for the remainder of the current two-year budget cycle, aiming to close a projected $2.3 billion shortfall through mid-2027.
What To Know
“We are facing an affordability crisis,” Ferguson said. “It is time to change our state’s outdated, upside down tax system to serve the needs of Washington today. To make our tax system more fair, millionaires should contribute more toward our shared prosperity.”
Ferguson said a portion of the revenue raised through a millionaire’s tax should be used to provide relief for lower-income residents. That could include expanding the state’s working families tax credit or reducing sales taxes. He also emphasized that he does not support any form of income tax on those earning less than $1 million.
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In a post on X, formerly Twitter, Ferguson said that tax cuts approved earlier this year by President Donald Trump have “made our state’s unfair tax structure even worse.”
Washington remains one of nine states without any personal income tax, alongside Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, and Wyoming. However, several states have adopted special tax rates for high earners. California, for example, imposes an additional 1 percent tax on income above $1 million, on top of its standard high rate. According to TurboTax, five states and Washington, DC, have adopted millionaire taxes: California, Connecticut, Maine, New Jersey, and New York.
In Washington, 7.85 percent of residents are millionaires, placing the state in the top 10 nationwide, according to Statista. However, according to a report by the Washington State Standard, such a tax would only impact less than 0.5 percent of Washingtonians.
What People Are Saying
Governor Ferguson said: "President Trump’s massive tax cuts for the wealthy made our state’s unfair tax structure even worse. I'm committed to sending a significant portion of gains from a Millionaires’ Tax back into the pockets of hardworking Washingtonians, to help make life more affordable."
Representative Travis Couture, the ranking Republican on the House Appropriations Committee, said: “If record revenue couldn’t balance the budget, a ‘millionaire’ income tax won’t either. This is a spending problem, not a revenue problem."
What Happens Next
If approved in the upcoming legislative session, the millionaires tax could take effect by 2029 and generate at least $3 billion a year.
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