Washington voters face November ballot on 9.9% income tax for high earners
Washington State voters will decide in November whether to keep a new 9.9% income tax on individuals earning over $1 million, a measure expected to raise $3 billion annually. Critics argue the tax is an 'income tax' that could drive out wealthy residents and lead to broader taxation, while supporters call it a targeted 'millionaires tax' necessary to address fiscal shortfalls. Administrative complexities, including potential liabilities for nonresidents and cross-border issues with Oregon, have emerged as key concerns.
Key points
- The tax imposes a 9.9% rate on income exceeding $1 million, projected to generate over $3 billion in annual revenue.
- Initiative 645 seeks to repeal the tax and constitutionally bar future state income taxes on individuals.
- Administrative challenges include potential tax liabilities for nonresidents with business ties to Washington and conflicts with Oregon’s community property laws.
- Critics argue the 'millionaires tax' label obscures the fact that it is a broad income tax, while supporters emphasize its targeted nature and fiscal necessity.
Background
This follows a broader national debate on taxing the wealthy, including California’s proposed 5% net-worth tax on billionaires, which critics warn could trigger mass relocations of entrepreneurs. Washington’s move breaks a long-standing state taboo against individual income taxes, a policy stance that has defined its fiscal landscape for decades.
How outlets are covering it
The New York Times frames the debate as a choice between resenting the rich or new taxes, noting critics fear the tax will drive out entrepreneurs and lead to broader income taxes. The Center Square highlights administrative nightmares, including potential tax liabilities for nonresidents and complex cross-border issues with Oregon. Seattle Red’s opinion piece argues the media should call it an 'income tax' rather than a 'millionaires tax,' emphasizing that the tax base is income, not just wealth, and that the label obscures the broader policy question of whether Washington should tax individual income at all.
Why it matters
The outcome will determine whether Washington maintains its status as a no-income-tax state and could set a precedent for other states considering similar measures. It also highlights the growing tension between fiscal needs and the political taboo against income taxes in the Pacific Northwest.
What to watch
Voters will cast ballots on Initiative 645 in November. If passed, the tax would be repealed, and future income taxes on individuals would be constitutionally barred. If rejected, the tax will remain in effect, and the state will continue to grapple with administrative challenges and potential economic impacts.
- Washington Taxed Its Millionaires. Now the Rich Want It Repealed. The New York Times
- Nonresidents could face paying WA's new income tax The Center Square
- Real estate agent claims Florida has allured Washington state's millionaires due to 'punitive tax environment' Yahoo
- Stop calling WA's income tax a 'millionaires tax' Seattle Red
- Public-sector unions pour millions into campaign to keep Washington income tax The Black Chronicle
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Read on The New York Times