In a definitive shift for one of the nation’s last tax havens, Washington lawmakers have passed the state’s first-ever income tax, ending a 93-year drought and triggering an immediate clash with the state’s billionaire class.
The measure, which cleared the House after a grueling, record-breaking 25-hour floor debate, imposes a 9.9% tax on personal income exceeding $1 million annually. The legislation now heads to Governor Bob Ferguson, who is expected to sign it into law.
A Century of Precedent Overturned
The 52–46 vote followed a marathon filibuster by House Republicans, who introduced 81 amendments in a failed attempt to derail the bill. The session shattered the state’s previous record for floor debate by 16 hours.
Since 1932, Washington has relied exclusively on sales and business taxes, a structure critics argue is the most regressive in the United States. Under the current code, the state’s lowest earners pay approximately 13.8% of their income in taxes, while the top 1% pay just 4.1%.
“We still have a tax code based on apples and cherries while building some global-leading technology every which way you throw a rock,” Rep. Brianna Thomas (D) told reporters, noting that the state’s agrarian-era tax laws failed to capture wealth from modern giants like Amazon and Microsoft.
Key Provisions of the Legislation
The “Millionaires Tax” is projected to generate between $3.5 billion and $4 billion annually once it takes full effect in 2029. To offset the new burden on high earners, the bill includes several populist relief measures:
- Sales Tax Exemptions: Removal of taxes on diapers, over-the-counter medications, and hygiene products.
- Tax Credits: An expansion of the Working Families Tax Credit.
- Deficit Reduction: Revenue is earmarked to close a projected $10 billion to $12 billion budget shortfall over the next four years.
The “Billionaire Flight” Begins
The passage has already accelerated a high-profile exodus of Washington’s wealthiest residents. Shortly after the vote, Starbucks founder Howard Schultz announced a move to Miami, Florida—a state with no income tax. Schultz recently purchased a $44 million penthouse there.
He follows Amazon founder Jeff Bezos, whose 2023 relocation to Florida reportedly cost Washington an estimated $954 million in potential tax revenue in 2024 alone.
| High-Net-Worth Resident | Estimated Net Worth | Destination |
| Jeff Bezos | ~$200 Billion | Miami, FL |
| Howard Schultz | $6.6 Billion | Miami, FL |
Despite the departure of “mega-filers,” proponents remain undeterred. “I certainly hope Washington is more than a spreadsheet or a tally sheet to someone,” Rep. Thomas said, framing the tax as a matter of community sustainability rather than mere accounting.
National Momentum and Legal Hurdles
Washington’s move mirrors a growing national appetite for wealth taxation. Similar “Billionaire Tax” initiatives are gaining traction in California and at the federal level, where Sen. Bernie Sanders (I-VT) is pushing for a 5% annual wealth tax on those worth over $1 billion.
However, the Washington law faces a steep legal climb. A 1933 State Supreme Court ruling previously struck down an income tax, declaring that income constitutes “property” and must therefore be taxed at a uniform rate. The new legislation will almost certainly face an immediate challenge in the courts and likely a referendum vote by the public before it becomes the settled law of the land.
