Governor Bob Ferguson has signed the so-called 'millionaires tax' into law, setting up an immediate legal and political battle over the state’s first personal income tax.
Washington’s so-called "millionaires tax" has been signed into law following a record-breaking 25-hour legislative debate, setting up an immediate legal and political battle over the state’s first tax on personal income.
The measure places a 9.9% tax on income above $1 million. Supporters say it will benefit working families, students and small businesses, while critics are already moving to block it before payments are due in 2029.The bill passed in the final hours of the legislative session after Republicans attempted to stall its passage. That fight is now expected to shift to the courts — and potentially to voters.At a bill-signing ceremony in Olympia, Gov. Bob Ferguson framed the law as a matter of fairness."Families whose income is in the bottom 20% pay a whopping 13.8% of their total income in state and local taxes, while the wealthiest pay a far smaller percentage of their income," Ferguson said. "That's not fair, and that's not right."But critics argue the policy violates the state constitution."This tax that was just signed into law is an income tax, is clearly unconstitutional," said Jackson Maynard, executive director of the Citizen Action Defense Fund.The group, led in part by former Attorney General Rob McKenna, plans to file a lawsuit within days, arguing the tax improperly treats income as property without meeting constitutional requirements."If you’re going to do a tax on property, you have to apply it uniformly to everybody, and it’s capped at 1%. This is not that," Maynard said.Maynard added the challenge is about legal precedent, not wealth."We're just asking the court to continue to enforce the law as it's been in effect for the last 100 years," Maynard said.Republican leaders also warned the tax could eventually expand beyond the state’s highest earners."If you want to make the tax system fair, reform existing taxes, don’t make new taxes," said State Rep. Jim Walsh, the state GOP chair.Ryan Frost, director of Budget and Policy with the Washington Policy Center, said the structure of the law leaves room for future changes."It goes back to the people, as long as it's clear to the people that this is an income tax," Frost said. "They will sell it as a millionaire's tax as much as they want. But it's very clear in the bill that this is an income tax with an exemption for the first million. That exemption can be lowered or raised at any point in time, just by simple majority. And so I think the people will hopefully see through that and see that this income tax will most likely affect all of us eventually, especially with the direction our state budget is going."Ferguson said he expected both legal challenges and a public vote."Everybody knows this is going to the ballot box," Ferguson said. "From day one I said there'll be a court challenge, and there'll be a public conversation. I said today, that's appropriate and I look forward to it."He added that the tax could ultimately benefit residents and businesses."I anticipate that when the people realize these dollars go back in their pocketbooks, biggest tax break for small businesses in Washington state history, I think they'll support it," Ferguson said.Opponents are also preparing a ballot initiative to repeal the law, which would require roughly 340,000 valid signatures by early July.The lawsuit is expected to be filed within days and could quickly advance to the Washington State Supreme Court, setting the stage for a high-stakes decision on the future of income taxation in the state.Where is Jonathan Hoang? WA man with autism disappeared 1 year agoAs fuel prices rise, WA farmers face mounting challengesPolice say WA man shoots kid in the chest for throwing a water balloonSeattle high-rises connected by decommissioned Boeing 747 fuselageSCOTUS hears case that could impact WA ballot countingTo get the best local news, weather and sports in Seattle for free, sign up for the daily FOX Seattle Newsletter.Download the free FOX LOCAL app for mobile in the Apple App Store or Google Play Store for live Seattle news, top stories, weather updates and more local and national news.
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