Gov. Bob Ferguson signed Senate Bill 6346, dubbed the “millionaire’s tax,” into law March 31, enacting a 9.9% income tax on Washington residents earning more than $1 million per year. The tax is expected to generate roughly $3.5 billion annually when payments begin in 2029, affecting an estimated 21,000 households across the state.
The bill directs most of its revenue toward the state’s general operating budget, which funds K-12 schools, universities and health care. A 5% share goes to child care and early learning.
The measure also eliminates the sales tax on diapers, hygiene products and over-the-counter drugs, expands the Working Families Tax Credit to roughly 460,000 additional households and exempts thousands of small businesses from the state’s business and occupation tax.
Washington has long relied on sales taxes, and is widely considered among the most fiscally regressive states as one of nine in the nation without an income tax.
The state has not levied an income tax since 1933, when the state Supreme Court struck down a voter-approved version, ruling it an illegally constructed levy on property.
For Seattle University students, awareness of the new law remains uneven.
Karli Calo, a fourth-year philosophy and political science major and president of the Political Science Club at Seattle U, said the tax has not generated a lot of buzz among her peers.
“I have not heard any student discuss the ‘millionaire’s tax,’ even on social media where I know many of my fellow classmates are active,” Calo said.
The bill’s narrow scope has also prompted questions about how transformative its effects will be. The tax applies to roughly 0.5% of Washington households, and Calo says this limited application has led to debates over the bill’s potential impact.
“It’s a polarization rooted in how tangible the goals of this bill actually are,” Calo said.
Jaylen Leonard, a third-year political science and international studies major who represents The Washington Bus, the largest youth-led political organization in the state, said the passage of the bill felt like a milestone worth building on.
“Seeing all the hard work that was put into this bill being passed felt like a sense of accomplishment that I hope we feel more of in the coming years,” Leonard said.
Leonard said she sees the tax as directly relevant to students navigating Seattle’s cost of living, even if its benefits are not immediately obvious.
“I think that young people will be able to picture themselves in a city that they can afford and in a state that values its young voters,” Leonard said.
The Washington Bus played an active role in pushing the bill to passage. The group ran four listening sessions this year to gather student accounts of cuts to financial aid programs, including Washington’s Running Start and the Washington College Grant, and brought those stories directly to legislators in Olympia.
Bailey Medilo, The Washington Bus’ digital and communications officer, said the advocacy strategy was built around making those personal stakes visible to lawmakers.
“We sent young leaders to Olympia to testify directly in committee hearings, and we held dozens of meetings with legislators where volunteers shared personal stories of how this revenue would benefit them,” Medilo said.
Opponents have announced plans for both a lawsuit and a public vote to repeal the law. Former Washington Attorney General Rob McKenna is leading the legal challenge on behalf of the Citizen Action Defense Fund, arguing the tax violates the 1933 state Supreme Court precedent that treated income as property.
Redmond hedge fund manager Brian Heywood and his organization, Let’s Go Washington, have plans to pursue a referendum, with a deadline to collect roughly 190,000 signatures by June 10.
Medilo explained the benefits of this tax on the state as a whole..
“Washington has historically been the second-worst state in the nation for taxation equity. Our middle and low-income residents currently pay a much higher percentage of their income in taxes than high earners do,” Medilo said. “Ultimately, everyone benefits when we have well-funded public programs, resources and capital projects that improve our cities.”
Income-tax proposals have been rejected by Washington voters 10 times over the past nine decades. Most recently, in 2010, a tax on people earning more than $200,000 a year lost in 38 of 39 counties.
With a potential repeal effort on the horizon, Medilo urged students not to disengage.
“Now, more than ever, it is vital for young people who rely on state programming and education funding to stay involved,” Medilo said.
For now, the law is on the books. However, its future remains as unsettled as the debate that produced it.
