March 9, 2026 – Washington State made history by passing a historic millionaires tax bill, marking the first-ever income tax in the state’s history. After a grueling 25-hour debate, which involved an intense filibuster and 81 amendments by Republicans, the legislation passed with a vote of 52-46.
The bill imposes a 9.9% tax on personal income exceeding $1 million annually. This monumental step aims to address the state’s long-standing reliance on sales and business taxes while tackling growing income inequality.
The First Income Tax in Washington’s History
For over 90 years, Washington has been one of the only nine states without an income tax. Its tax structure, which was originally designed for an agrarian, timber, and shipping-based economy, has been unable to keep up with the massive growth of global corporations such as Amazon, Microsoft, and Boeing. As a result, the state’s tax system has become increasingly regressive.
Rep. Brianna Thomas, a Democratic supporter of the bill, highlighted the need for reform, noting that Washington’s tax system disproportionately burdens low-income residents. “The top 1% of earners pay just 4.1% of their income in taxes, while the bottom 20% pay 13.8%,” Thomas explained.
A New Era for Washington’s Tax Code
The new tax law will apply to approximately 21,000 residents, or less than 1% of the population, and is projected to generate $3.5 to $4 billion annually once it takes effect in 2029. The revenue will help bridge the state’s projected $10 billion to $12 billion budget deficit over the next four years.
In addition to the millionaire tax, the bill includes tax relief for other residents, such as sales tax exemptions for diapers, over-the-counter medications, and personal hygiene products. It also expands the Working Families Tax Credit.
Challenges and Controversies
The passage of the bill was far from easy. A record 81 amendments were introduced during the debate, and even Democratic lawmakers had differing views on the legislation. However, the bill was eventually passed in the Senate with a 27-21 vote.
Despite the triumph, Rep. Thomas cautioned that the road to full implementation is far from over. “We still have to get through a review by the state Supreme Court and a potential vote by the people,” she said.
Washington Joins National Push for Wealth Taxes
Washington’s groundbreaking legislation is part of a broader national movement to address wealth inequality. Senators Bernie Sanders and Rep. Ro Khanna have introduced the “Make Billionaires Pay Their Fair Share Act,” which proposes a 5% annual wealth tax on Americans with a net worth over $1 billion. Similarly, California is pushing for the 2026 Billionaire Tax Act, which would target billionaires with a one-time 5% tax to generate revenue for healthcare and food assistance.
Billionaires Respond to Washington’s Millionaires Tax
Following the passage of the bill, billionaire Starbucks founder Howard Schultz announced he was leaving Seattle for Miami, where he recently bought a $44 million penthouse. Although Schultz did not explicitly link his decision to the millionaires tax, his move underscores the growing trend of wealthy individuals relocating to states with no income tax.
In 2023, Amazon founder Jeff Bezos also moved to Miami, costing Washington an estimated $954 million in lost tax revenue for 2024.
Despite these high-profile departures, Rep. Thomas remained unphased. “This is not a math problem to me. This is a policy problem rooted in the fact that I care about my community,” she said.
