Washington Democrats Pass Controversial 'Millionaires Tax'

New income tax law faces legal challenges and business exodus concerns

Mar. 11, 2026 at 9:05pm

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On March 10, 2026, the Democratic-controlled Washington state legislature passed a new 'millionaires tax' over strong Republican opposition. The law imposes a 9.9% income tax on individuals earning over $1 million per year, despite voters having rejected a state income tax 10 times in the past. Republicans proposed over 70 amendments to protect families and businesses, all of which were rejected. The passage of the law has already triggered announcements from major companies like Starbucks that they will be relocating to other states, raising concerns about the impact on jobs and the economy in Washington.

Why it matters

The new income tax law has sparked intense political and legal debates in Washington. Critics argue the tax is unconstitutional and will drive businesses and residents out of the state, while proponents claim it will fund critical public services. The battle over the tax reflects the deep partisan divisions in Washington politics and the ongoing struggle over the role of government and taxation.

The details

The new 'millionaires tax' was passed by the Democratic-controlled state legislature on a 51-46 vote, with all Republican amendments rejected. The law imposes a 9.9% income tax on individuals earning over $1 million per year. Within an hour of the law's passage, Starbucks founder Howard Schultz announced he would be relocating the company to Florida, echoing the exodus of other major firms like Fisher Investments to Texas after the state passed a capital gains tax in 2021. Republicans argued the tax was unconstitutional and would harm families and businesses, but Democrats dismissed their over 70 proposed amendments.

  • On March 10, 2026, the Washington state legislature passed the 'millionaires tax' law.
  • In May 2021, Washington state passed a capital gains tax that triggered a business exodus.

The players

Leslie Lewallen

Director of Future 42 Clark County, a conservative nonprofit organization focused on advancing free market policies and personal liberty in Washington state.

Howard Schultz

Founder of Starbucks, who announced plans to relocate the company from Washington to Florida shortly after the 'millionaires tax' was passed.

Jamie Pedersen

Senate Majority Leader in the Washington state legislature, who admitted that some Democratic promises around the tax were "pie crust promises - easily made, easily broken."

Manka Dhingra

Washington state senator who voted for the 'millionaires tax' despite campaigning against a state income tax and claiming it was unconstitutional.

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What they’re saying

“That was... a pie crust promise. Easily made, easily broken.”

— Jamie Pedersen, Senate Majority Leader

“I do not support the implementation of a state income tax and... it has already been deemed unconstitutional.”

— Manka Dhingra, Washington State Senator

What’s next

The new 'millionaires tax' law is expected to face immediate legal challenges, with critics arguing it violates the state constitution. The impact on businesses and residents leaving Washington will also continue to be monitored.

The takeaway

The passage of the 'millionaires tax' in Washington highlights the deep partisan divisions in the state and the ongoing battle over the role of government and taxation. While proponents argue the tax will fund critical public services, critics warn it will drive businesses and residents out of the state and harm the economy. The legal and political fight over the tax is far from over.