Internal Emails Reveal Plan for Statewide Income Tax in Washington

Proposed 'millionaires tax' is just the first step in a multi-year strategy, according to policy expert

Published on Feb. 24, 2026

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According to Ryan Frost of the Washington Policy Center, internal emails from the prime sponsor of a proposed 9.9% income tax bill in Washington state reveal a calculated, multi-year strategy to bypass the state constitution and impose a statewide tax on everyone, not just the wealthy. Frost argues the capital gains tax passed in 2020 was the first step in this plan, with the goal of provoking a court challenge to reclassify income as property and enable a progressive income tax with a simple majority vote.

Why it matters

This story highlights the disconnect between the public messaging around a proposed 'millionaires tax' and the internal strategy of state lawmakers, raising concerns about the true intentions behind the tax proposal and the potential for it to eventually impact a broader swath of taxpayers beyond just the wealthy.

The details

In a 2018 email, Sen. Jamie Pedersen, the prime sponsor of the income tax bill, told a former Democratic state legislator that the 'more important benefit' of the capital gains tax was on 'the legal side' - the goal being to provoke a court challenge that would allow the state to enact a progressive income tax with a simple majority vote. Pedersen also acknowledged that the 'major use of new revenue from a capital gains tax would be to reduce property and/or sales taxes,' but this trade-off never materialized, with property and sales taxes remaining high even as the capital gains tax revenue flowed to the state.

  • The capital gains tax was passed in 2020.
  • From 2022-2024, the state collected $1.8 billion in capital gains revenue, but none of it went to reducing property or sales taxes.

The players

Sen. Jamie Pedersen

The prime sponsor of the proposed 9.9% income tax bill in Washington state, who laid out the multi-year strategy in a 2018 email.

Dick Nelson

A former Democratic state legislator from Seattle who received the 2018 email from Sen. Pedersen.

Ryan Frost

The director of Budget and Tax Policy at the Washington Policy Center, who argues the internal emails reveal the true intentions behind the proposed income tax.

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What they’re saying

“The 'millionaires' tax' is not the goal. It is just the next step in enabling lawmakers to reach into every Washingtonian's paycheck.”

— Ryan Frost, Director of Budget and Tax Policy, Washington Policy Center (clarkcountytoday.com)

“The more important benefit [of the capital gains tax] was on the legal side. The goal was to provoke a court challenge that would give the Supreme Court a chance to overturn prior rulings that income is property under the state constitution. If they could reclassify income, it would 'make it possible to enact a progressive income tax with a simple majority vote.'”

— Sen. Jamie Pedersen, Prime sponsor of income tax bill (clarkcountytoday.com)

What’s next

The proposed 9.9% income tax bill is currently working its way through the state legislature, with the goal of eventually lowering the threshold to capture a broader swath of taxpayers beyond just the wealthy.

The takeaway

This story highlights the importance of scrutinizing the true intentions behind tax proposals, as lawmakers may be pursuing a long-term strategy that differs from their public messaging. Voters should be wary of promises of tax relief in exchange for new taxes, as the historical track record suggests those commitments are often not kept.