After hours of dramatic floor speeches and constitutional hand-wringing, Senate Democrats pushed through SB 6346 — their long-coveted “millionaires’ tax.” The bill slaps a 9.9% tax on personal or household income over $1 million and now heads to the House.

Democrats insist this is about “fairness,” fixing Washington’s allegedly regressive tax code, and funding education, healthcare, and tax relief for working families. Opponents — meaning every Senate Republican and even three Democrats — call it unconstitutional and warn it will send high earners and business investment packing.

The bill does sprinkle in some politically marketable goodies:

• 7% of revenues to county public defense
• Expanded Working Families Tax Credit for 18–24-year-olds
• A slightly bigger B&O tax credit for small businesses
• A sales tax exemption for hygiene products

But when Republicans tried to sweeten the deal for actual families — like Sen. Nikki Torres’ diaper tax exemption proposal — Democrats said no. When Sen. Judy Warnick proposed eliminating a marriage penalty baked into the bill, Democrats said no again. When Republicans suggested voters should amend the state constitution first to allow a graduated income tax? Also no.

Apparently, “tax the rich” is urgent. Letting voters decide? Not so much.

Democrats argue the structure mirrors Washington’s capital gains tax to make administration easier. Critics argue that’s precisely the problem — layer enough new taxes together and eventually “only millionaires” becomes everyone.

Sen. John Braun summed up the opposition case: Washington’s economy used to attract families and businesses. Now, he argues, lawmakers are chipping away at the very prosperity they claim to protect.

The final vote was 27–22, with three Democrats breaking ranks to join Republicans in opposition — a small but telling crack in the “it’s only about fairness” narrative.

The bill now moves to the House, where the real question isn’t whether Democrats have the votes.

It’s whether Washington voters will eventually get one. Read more at Center Square.

A new policy brief from the Washington Research Council, summarizing national data from the Council on State Taxation, delivers an inconvenient reality check: Washington businesses paid 50% of all state and local taxes in fiscal year 2024.

That’s before last year’s sweeping tax increases under Gov. Bob Ferguson are fully baked into the numbers.

In other words, this may be the “good old days.”

According to the report, Washington businesses paid $10,400 per employee in state and local taxes — the 11th highest in the country and nearly 21% above the national average of $8,600. So much for the idea that Washington is some low-tax haven for job creators.

And it’s not just one tax category doing the damage. The breakdown shows:

• Sales taxes: $8.6 billion (27.2% of total business taxes)
• Property taxes: $7.3 billion (23.2%)
• Business & Occupation (B&O) tax: $6.4 billion (20.4%)

That B&O tax, of course, is the uniquely Washington invention that taxes gross receipts rather than profits — meaning businesses owe money whether they’re making any or not.

While total business taxes equal 4.3% of private-sector gross state product (slightly below the 4.5% national average), the per-employee burden tells a different story. Employers here pay more per worker than most states — and that’s before layering on the newest round of tax hikes.

Then there’s competitiveness.

Washington has fallen from 33rd in 2020 to 45th in 2026 on the Tax Foundation’s State Tax Competitiveness Index. The report bluntly notes that Washington’s tax competitiveness is now the sixth worst in the nation — and that ranking doesn’t even fully reflect the most recent increases.

So while lawmakers debate new income taxes, payroll taxes, and wealth taxes in the name of “fairness,” the data shows businesses are already footing half the bill.

At some point, “fair share” starts to look a lot like “final straw.” Read more Seattle Red.

Two recent Seattle Times stories — one on the wealth tax debate and the other on Seattle’s head tax windfall — accidentally tell the same story: Washington’s tax experiment is starting to wobble.

On the state level, lawmakers are quietly dialing back last year’s estate tax hike through Senate Bill 6347, trimming rates from a 10–35% range down to 10–20%, depending on estate size. That’s not exactly a repeal — but it’s a noticeable retreat. When politicians who just raised the “death tax” are now softening it, something’s changed.

Meanwhile, Seattle’s 5% excess compensation tax — the JumpStart payroll tax — pulled in $115 million more than expected. Cue the celebration tour. But critics at the Washington Policy Center took aim at Mayor Katie Wilson’s dismissive “filthy rich” rhetoric and the cheerleading over “overperforming” taxes. Because here’s the uncomfortable reality: overperformance today can mean outmigration tomorrow.

Senate Majority Leader Jamie Pedersen has openly acknowledged that “a lot of people [are] looking at redomiciling themselves.” That concern also explains the aggressive residency language in Senate Bill 6346 — the proposed 9.9% income tax on earnings over $1 million — where just 30 days in the state can trigger tax exposure. Apparently, if people might leave, the solution is to grab them faster.

Former Sen. Reuven Carlyle has warned of a “tipping-point scenario.” Hedge fund manager Brian Heywood says dozens of couples are exploring exits. Data already shows net losses of households earning over $200,000, with Florida, Texas, Nevada — and yes, Las Vegas luxury neighborhoods — seeing an influx of former Washingtonians.

And these aren’t cartoon villains twirling mustaches. They’re tech founders, small business owners, investors — the very people whose stock-heavy compensation gets hit by Seattle’s JumpStart tax, the state capital gains tax, the estate tax, and now a proposed 9.9% income tax. Stack it all together and combined marginal rates could push past 18%.

The exodus isn’t instant. Families don’t uproot overnight. But policy momentum matters. When lawmakers pile on layered taxes and dismiss concerns as protection of the “filthy rich,” they risk accelerating the very outflow they claim won’t happen.

Rolling back one tax is a start. Pretending cumulative burdens don’t matter isn’t reform.

Washington’s no-income-tax reputation helped build its prosperity. Keep pushing punitive policies, and “filthy rich” won’t be an insult.

It’ll be a forwarding address. Read more at the Washington Policy Center.

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