Washington state is facing a significant financial challenge, with a budget shortfall exceeding $2 billion. In response, Democratic leaders have proposed a new "millionaires tax" of 9.9% on personal income over $1 million, marking a historical shift toward implementing a personal income tax for high earners.
This tax is expected to come into effect in two years and is paired with proposed tax breaks for small businesses and low-income residents. The initiative aims to address the economic pressures resulting from job cuts at major employers in the state and ongoing federal funding uncertainties.
Governor Bob Ferguson has shown support for taxing wealthy residents, estimating that this measure would impact less than 0.5% of the population and generate over $3 billion annually. However, he noted that the current draft legislation lacks sufficient support for small businesses and low-income individuals.