Washington Lawmakers Propose Millionaire's Tax, but Offer Little Relief for Regular Residents

The proposed tax plan focuses on taxing the wealthy, but provides minimal broad-based tax cuts for average citizens.

Feb. 4, 2026 at 9:07am

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Washington state lawmakers have unveiled a proposal for a 'millionaire's tax' that would place a $3.5 billion per year burden on the state's wealthiest residents. However, the plan offers little in the way of broad-based tax relief for regular citizens, with the main benefit being a sales tax exemption on 'grooming and hygiene products' like toothpaste and shampoo. Critics argue the plan does not go far enough to address the state's regressive tax system that disproportionately burdens lower-income residents.

Why it matters

Washington's tax system has long been criticized as one of the most regressive in the nation, placing a higher tax burden on those with lower incomes. The proposed millionaire's tax aims to address this imbalance, but the limited scope of tax relief for average citizens raises questions about whether the plan truly restructures the state's unfair tax code.

The details

The millionaire's tax proposal would place a new state income tax on any annual income over $1 million, generating an estimated $3.5 billion per year. However, most other taxes like property taxes, gas taxes, and sales taxes would remain unchanged for the vast majority of residents. The only broad-based tax relief included is a sales tax exemption on 'grooming and hygiene products' such as toothpaste, shampoo, and suntan lotion.

  • The millionaire's tax proposal was released by state Democrats on Tuesday, February 4, 2026.

The players

Bob Ferguson

The Democratic governor of Washington, who expressed concerns that the tax relief provisions in the proposal are too limited.

Jamie Pedersen

A Democratic state senator from Seattle who argued the proposal represents a 'generational opportunity' to restructure Washington's 'broken, upside-down tax system'.

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What they’re saying

“This is not close.”

— Bob Ferguson, Governor

“We have a broken, upside-down tax system that we have been stuck with for 90 years. We have a generational opportunity in front of us to change that trajectory, and to make the whole system fairer.”

— Jamie Pedersen, State Senator

What’s next

The proposed millionaire's tax plan will now move through the state legislative process, where it may face opposition from Republican lawmakers who oppose any new state income tax.

The takeaway

While the millionaire's tax proposal aims to make Washington's regressive tax system more equitable, the limited scope of tax relief for average citizens raises doubts about whether the plan truly addresses the core unfairness of the state's tax code. Lawmakers will need to grapple with providing more substantial broad-based tax cuts if they hope to meaningfully restructure the state's tax system.