Washington Democrats just voted to punch a hole in the state’s no-income-tax tradition—and Republicans warn the “millionaire” label is the oldest trick in the tax-and-spend playbook.
Quick Take
- Washington’s state Senate passed SB 6346, a 9.9% tax on income above $1 million, and the bill now moves to the state House.
- Gov. Bob Ferguson supports the concept but says he won’t sign the current version unless more money is sent back to families and small businesses.
- The tax would begin in 2028 and is projected to raise roughly $3.5–$3.7 billion per year, affecting about 20,000 households.
- Republicans argue the bill risks future expansion beyond millionaires and raises concerns about blocking a referendum option.
- Democrats say the measure offsets Washington’s regressive tax structure while pairing the new tax with targeted relief.
Senate approves a 9.9% “millionaires” income tax and sends it to the House
Washington’s Senate approved Senate Bill 6346 on February 16, 2026, by a 27–22 vote, advancing a new 9.9% tax on annual income above $1 million. Republicans opposed the bill unanimously, while three Democrats voted no, signaling fractures even inside the majority caucus. The measure now heads to the state House, where lawmakers will decide whether to keep the framework intact or rewrite it under pressure from the governor and critics.
Democrats backing SB 6346 frame the tax as a way to fund public priorities while correcting an imbalance in how Washington collects revenue. Washington is among the states without a broad income tax, leaning heavily on sales and property taxes. Supporters argue that structure hits working families hardest, and they present SB 6346 as a way to shift some burden upward—while also packaging several forms of tax relief alongside the new levy.
What the bill taxes, when it starts, and who it hits
SB 6346 would apply the 9.9% rate to income above $1 million starting in 2028, a delayed rollout that gives lawmakers time to finalize implementation rules and budget assumptions. Reporting around the bill estimates the affected group at about 20,000 households—less than 1% of Washington residents—with projected revenue of roughly $3.5 to $3.7 billion per year once it takes effect. The proposal also excludes home value from the tax base as described in coverage.
Bill language and summaries describe several add-ons intended to soften the political blow: a higher business-and-occupation tax exemption threshold for smaller firms, changes tied to sales taxes on certain items, expansion of the Working Families Tax Credit, a charitable-giving deduction, and a share of funds directed to counties and public defense. In plain terms, Democrats are trying to sell a “tax the top, rebate the rest” approach, even as opponents question how durable those promises are over time.
Ferguson’s leverage: support for the tax, opposition to the spending plan
Gov. Bob Ferguson’s position complicates the standard partisan script. He has signaled support for the millionaire-tax concept while drawing a hard line against the spending plan attached to the Senate-passed approach, saying he won’t sign the current version. Ferguson has pushed for significant dollars to flow back to families and small businesses, including expanded relief for roughly 170,000 small businesses and a larger Working Families Tax Credit footprint as outlined in reporting and bill summaries.
That stance creates a rare moment where fiscal concerns are being raised not just by Republicans, but by a Democratic governor demanding bigger offsets. For conservatives watching from outside Washington, the takeaway is straightforward: if even a supportive governor is warning that the current balance is off, then the House debate is not just about a new tax rate—it is about whether Olympia can resist turning a targeted tax into a broader spending engine that grows government first and asks forgiveness later.
Republican objections center on expansion risk, referendums, and economic behavior
Republican leaders argue SB 6346 opens the door to expanding an income tax beyond high earners, warning that the “only millionaires” pledge is political, not permanent. Critics also point to concerns about limiting voters’ ability to challenge the measure through a referendum process, a sensitive issue in a state where residents have historically resisted broad income taxes. Those arguments focus less on whether the state can collect the money and more on whether it can be trusted to stop.
Washington's Millionaire Tax Is Economic Suicide https://t.co/Ej0PrepvKn
— RealClearMarkets (@rc_markets) February 19, 2026
Supporters counter that Washington’s existing tax mix is unusually regressive and that this new revenue could stabilize long-term budget pressures and fund education, health care, and housing. The unresolved question—because the bill has not completed the House process and the governor has not committed to signing it as written—is how durable any relief provisions will be compared with the new revenue stream. Until the House acts, the most concrete facts remain the Senate vote, the rate, the start date, and Ferguson’s demand for major revisions.
Sources:
WA governor weighs in after millionaire tax passes
Washington Senate OKs income tax on millionaires
Millionaires’ tax passes the Senate
Washington State Senate passes 9.9% tax on income over $1 million; bill heads to House
WA State Millionaires Tax – Proposed Legislation
