Washington State Considers Millionaires' Income Tax

Proposed legislation would impose 9.9% levy on household earnings above $1 million

Feb. 25, 2026 at 1:50am

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A new bill creating Washington state's first income tax, targeting households earning more than $1 million annually, is progressing in Olympia. The legislation would impose a 9.9% levy on household earnings above $1 million per year, while also providing tax breaks for small businesses, eliminating the sales tax on grooming and hygiene products, and boosting funding for the state's Working Families Tax Credit.

Why it matters

The proposed income tax on millionaires is aimed at addressing Washington's regressive tax structure, which critics argue places a disproportionate burden on lower-income residents. However, opponents warn the bill could drive wealthy residents and job creators out of the state.

The details

The bill moved from the Senate to a packed House committee hearing, where supporters and opponents clashed over the proposal's potential impact. Supporters argue the measure would help fix the state's tax code, while critics claim it would discourage business and job growth in Washington.

  • The committee is scheduled to vote on the proposal on Friday, February 28, 2026.

The players

Alina Swart

A recipient of the state's Working Families Tax Credit, which the proposed legislation would boost funding for.

Gwen Goodfellow

A caregiver who urged lawmakers to pass the bill, arguing it would protect vulnerable residents.

Brent Frei

The founder of TerraClear, a company that testified it is actively shifting operations away from Washington due to the proposed tax.

Hohenheim Rackram

A critic who expressed concern that the $1 million income tax threshold could eventually be lowered to affect more residents.

Rep. April Berg

The Finance Committee Chair, who said the state is investigating allegations of manipulation to the public comment website related to the bill.

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What they’re saying

“I am very grateful for this credit, and use mine to may pay phone bill for a year in advance for my husband and I. It takes one monthly payment off my list, and I know it's taken care of so doctors and schools and my children can always reach me.”

— Alina Swart, Tax credit recipient

“Caregivers and vulnerable residents don't have the option to leave. It's time to fix our upside-down tax code and protect the people who truly cannot afford these cuts.”

— Gwen Goodfellow, Caregiver

“There's no reason at all to start a business in Washington state anymore. Our hard work goes to wasted spending. My company is actively shifting our operations away from the state of Washington and I'll leave as soon as I possibly can.”

— Brent Frei, Founder, TerraClear

“If you give a mouse a cookie, he will want a glass of milk. If you give them a millionaires' tax, they'll want it on 500,000, 100,000 and then the rest of us.”

— Hohenheim Rackram

What’s next

The committee is scheduled to vote on the proposal on Friday, February 28, 2026.

The takeaway

The proposed millionaires' income tax in Washington state has sparked a heated debate, with supporters arguing it would address the state's regressive tax structure and critics warning it could drive away wealthy residents and businesses. The outcome of the committee vote on Friday will be a key next step in determining the fate of the legislation.