WA Lawmakers Debate Millionaires Tax Proposal

Gov. Ferguson wants more revenue returned to residents through tax credits and exemptions

Feb. 3, 2026 at 10:07pm

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A proposed 9.9% tax on annual income over $1 million in Washington state has sparked debate between lawmakers and Gov. Bob Ferguson. While supporters argue the bill fixes a regressive tax code, Republicans claim it targets married couples earning $500,000 each. Gov. Ferguson has rejected the current draft, demanding "significantly more" of the revenue go back to residents via higher small business tax credits and expanded sales tax exemptions for essentials like diapers.

Why it matters

The millionaires tax proposal is a contentious issue in Olympia, with supporters saying it will address inequities in the state's tax system, while opponents argue it's a gateway to a broader state income tax that voters have repeatedly rejected.

The details

The proposed Senate Bill 6346 would impose a 9.9% tax on annual income over $1 million, projected to raise $3.7 billion a year from roughly 30,000 wealthy households starting in 2028. However, Gov. Ferguson has rejected the current draft, saying it doesn't do enough to provide relief for working families and small businesses. The governor wants a larger expansion of the Working Families Tax Credit and about $1 billion in tax relief for small businesses, as well as more sales tax exemptions for essential items like diapers.

  • The proposed millionaires tax would take effect in January 2028.
  • A public hearing on Senate Bill 6346 is scheduled for Friday, February 4th at 1:30 p.m. in the Ways and Means Committee.

The players

Gov. Bob Ferguson

The governor of Washington state who has said he would support a millionaires tax but is rejecting the current proposal, demanding more revenue be returned to residents.

Senate Bill 6346

The proposed legislation that would impose a 9.9% tax on annual income over $1 million, projected to raise $3.7 billion a year.

Sen. Noel Frame

A Democratic lawmaker who said the proposal addresses hard hits from federal cuts and fixes a broken, 90-year-old tax code, while softening the burden on working people.

Sen. Majority Leader Jamie Pederson

A Democratic lawmaker who explained the proposal is designed to mirror the current tax code and provide credits for taxes already paid.

Rep. Drew Stokesbary

A Republican lawmaker who said the Washington millionaires tax will also apply to married couples who earn $1 million a year combined, not $1 million each.

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What they’re saying

“There is much that we agree on, and the Senate's proposal is a good start. But we have a long way to go.”

— Gov. Bob Ferguson

“I said a significant percentage of that revenue must go directly back in the pockets of Washingtonians.”

— Gov. Bob Ferguson

“We're sort of mirroring this up with the current tax code. Give a credit for capital gains tax already paid, you give a credit for B&O tax already paid, when you have passthrough entity income and Public Utility tax, which is for some businesses, paid in lieu of B&O tax, and you start to really reduce that tax responsibility, in some cases, because of the B&O tax paid, for instance, some people, just like, won't owe anything at all under this.”

— Sen. Noel Frame

“We deliberately made the rate here exactly equal to the capital gains rate on income over a million dollars. Right? So, you know, and that's a rate that's already in effect for this income level.”

— Sen. Majority Leader Jamie Pederson

“It goes to our point that this is not just dependent on people who make a million dollars a year. Already, when they introduced the bill, it will hit people who make $500,000 a year if their spouse also makes that much. It's only a matter of time until that applies to folks with lower and lower incomes.”

— Rep. Drew Stokesbary

What’s next

The proposed millionaires tax legislation, Senate Bill 6346, is scheduled for a public hearing on Friday, February 4th at 1:30 p.m. in the Ways and Means Committee. The governor and lawmakers will continue to debate the details of the proposal, including how much revenue should be returned to residents through tax credits and exemptions.

The takeaway

The debate over a millionaires tax in Washington state highlights the ongoing tensions between lawmakers and the governor over how to address inequities in the state's tax system. While supporters argue the proposal will raise significant revenue, opponents contend it could be a gateway to a broader income tax that voters have repeatedly rejected. The outcome of these negotiations will have significant implications for the state's fiscal future and the financial burden on its wealthiest residents.