Washington state Democrats look at imposing income tax on higher earners

Democratic state senators are eyeing an income tax on millionaires as they seek to overcome Washington’s persisting budget shortfall.

Individuals and households would pay a 9.9% tax on adjusted gross income above $1 million, and get credit for state capital gains tax payments, according to those familiar with the broad outline. It could generate an estimated $3 billion from a projected 20,000 households subject to the tax.

The Senate Democratic Caucus discussed the politically explosive idea, which has been repeatedly rejected by voters and the state Supreme Court, during a retreat earlier this month. They also talked about other means of raising revenues to avert deficits in the current and next budget.

Senate Majority Leader Jamie Pedersen, D-Seattle, said Wednesday it’s too early to know if the income tax concept solidifies into legislation in the 2026 session that begins Jan. 12.

https://washingtonstatestandard.com/2025/10/30/washington-state-democrats-look-at-imposing-income-tax-on-higher-earners/