Last week, Washington Democrats rolled out a revamped version of Senate Bill 6346 — their so-called “millionaire’s tax” — and Gov. Bob Ferguson quickly signaled he’s ready to sign it. Supporters claim the 9.9% tax on income over $1 million will make the state more affordable by funding early learning programs, expanding financial aid for low-income households, and adding sales-tax exemptions for essential goods.

But outside Olympia’s Democratic majority, skepticism remains high.

A coalition of major employer groups — including the National Federation of Independent Business, Associated General Contractors, the Building Industry Association of Washington, and the Washington Retail Association — warned Ferguson that the bill could create “significant and unpredictable burdens” for employers. Their concern: layering a new income tax on top of Washington’s existing business-and-occupation tax without safeguards common in other states, potentially taxing income that businesses haven’t even realized yet.

They’re urging lawmakers to delay the bill until next year to allow for proper review and stakeholder input — a suggestion that appears unlikely to gain traction with Democrats racing toward the March 12 adjournment deadline.

Even small-business advocates are still trying to decipher the fine print. NFIB’s Washington director Patrick Connor noted the proposal now stretches 107 pages, and it’s still unclear how it will affect pass-through businesses whose reported income may look large on paper but translate into far smaller take-home pay for owners.

Meanwhile, critics say the entire tax is unnecessary.

Ryan Frost of the Washington Policy Center pointed out that Democrats are pitching new spending programs as justification for the tax — despite already controlling an $80-plus billion state budget. According to Frost, Olympia could fund those priorities today if lawmakers exercised basic spending discipline instead of pushing a brand-new tax.

But discipline has never been Olympia’s favorite policy tool.

Instead, Democrats appear determined to pass a sweeping income tax in the final days of session — hoping voters don’t notice the details until long after the bill is signed. Read more at Center Square.

Washington Democrats’ proposed income tax isn’t just controversial for being widely viewed as unconstitutional — it also quietly punishes people for getting married.

Under Senate Bill 6346, the new 9.9% tax applies to income above $1 million. But while single filers each get a $1 million threshold, married couples must share that same $1 million limit. The result? Two people each earning $700,000 pay nothing if they stay single. If they get married, suddenly $400,000 of their income becomes taxable — roughly a $40,000 penalty for saying “I do.”

Republicans attempted to fix the obvious flaw. Sen. Judy Warnick pointed out that the federal government eliminated the marriage penalty decades ago after couples literally started divorcing to avoid higher taxes. Her amendment would have removed the penalty.

Democrats blocked it.

Sen. Noelle Frame defended the structure, claiming it mirrors the state’s capital gains tax and changing it would be administratively inconvenient — apparently a better option than not penalizing marriage.

The bill still passed the Senate and now heads to the House, with Gov. Bob Ferguson already promising to sign it.

And just to make sure voters can’t interfere, Democrats tucked a “necessity clause” into the bill — a maneuver that prevents citizens from overturning it through a referendum.

So after voters rejected income taxes ten different times, Democrats’ latest workaround manages to do three things at once: push a legally questionable income tax, punish married couples, and block the public from voting on it.

Efficient government, Olympia style. Read more at Seattle Red.

In an op-ed by Mike Sotelo, president of the Ethnic Chamber of Commerce Coalition and co-chair of the Seattle Ethnic Chamber of Commerce, the Pacific Northwest business leader warns that Washington Democrats’ proposed income tax could hit minority entrepreneurs particularly hard.

Sotelo explains that many minority-owned businesses are structured as pass-through entities, meaning business income flows directly onto the owner’s personal tax return. Under the proposed 9.9% “millionaire’s tax,” that structure could transform what looks like high personal income on paper into a tax on revenue that is actually needed to pay employees, reinvest in equipment, or keep the business afloat.

The concern isn’t theoretical. According to data cited in the op-ed from the U.S. Small Business Administration, minority-owned businesses make up a growing portion of Washington’s economy — roughly 23% of employer businesses statewide. Many operate in industries like construction, retail, food service, and personal services where profit margins are thin and reinvestment is constant.

Sotelo argues that the $1 million threshold may sound like it targets the ultra-wealthy, but in reality it can capture the operating income of mid-sized businesses. A good year on paper — perhaps after finishing a major project — could suddenly trigger a large personal tax bill even if most of the revenue is reinvested into payroll, equipment, or expansion.

For minority entrepreneurs who already face barriers like limited access to capital and higher loan denial rates, Sotelo warns the additional tax burden could force difficult choices: raise prices, cut hiring, delay expansion, or move investment elsewhere.

He also notes Washington would be placing itself at a disadvantage compared with states such as Texas, Florida, Nevada, and Idaho, which have no personal income tax and actively recruit entrepreneurs seeking more predictable tax environments.

The bottom line of Sotelo’s op-ed: a policy Democrats say is aimed at the wealthy could end up squeezing the very small businesses and minority entrepreneurs who form the backbone of many communities.

And once again, the warning isn’t coming from partisan critics — it’s coming from the business leaders Democrats claim their policies are supposed to help. Read more at Center Square.

As Shift WA readers know, Governor Ferguson will sign the latest version of Washington Democrats’ so-called “Millionaires’ Tax” — which critics note is simply a new state income tax and part of what could become the largest tax increase in Washington history, all within the governor’s first two years in office.

Supporters claim the revised bill will improve affordability by expanding the Working Families Tax Credit, funding free school meals and childcare, and adding new sales tax exemptions. But critics point out that none of those priorities actually require a new tax — the state already operates with an $80+ billion budget, meaning lawmakers could fund these programs simply by exercising spending discipline.

Instead, Democrats are using those programs as political cover for a brand-new income tax that also contains a “poison pill” provision: if the income tax is ever struck down in court or repealed by voters, the limited tax relief provisions automatically disappear.

The bill also appears to fall far short of Ferguson’s own publicly stated conditions.

The governor previously said that a majority of the roughly $3.5 billion in annual revenue — about $1.9 billion — should be returned to taxpayers. The version he now says he will sign returns only about $950 million, or 27% of the revenue, barely half of the promised relief.

Other promises also fell short. Ferguson called for $1 billion in B&O tax relief for small businesses, but the current bill delivers only about $130 million, roughly nine times smaller than what he initially requested. Proposed sales-tax holidays never made it into the bill at all, and lawmakers rejected amendments that would have placed the $1 million income threshold into the state constitution to prevent future expansion of the tax.

A few elements did survive — including expansion of the Working Families Tax Credit and certain sales-tax exemptions — but the broader promise that most of the tax revenue would be returned to taxpayers clearly wasn’t met.

Which raises the obvious question: if the bill doesn’t meet the governor’s own requirements, why sign it anyway?

Critics say the answer is simple. The affordability talking points were useful during negotiations, but when it came time to pass a long-sought state income tax, those conditions quietly disappeared.

In Olympia, it seems the “millionaires’ tax” was never really about affordability — it was about finally getting an income tax on the books. Read more at the Washington Policy Center.

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