by Cynthia Stewart, Advocacy Chair emeritus, LWV of Washington

One of the final acts of the 2026 legislature was passage of the Millionaires’ Tax, SB 6346. This was historic in several ways. Most states do not have such a tax and adoption process was down-to-the-wire challenging.

The Millionaires’ Tax was proposed to cover much of Washington State’s multi-billion-dollar financial gap caused by a combination of factors: increases in the cost of doing business, lower than originally forecast revenue, and the need to offset decreased federal funding for health care, food and other poverty-related programs.  

In a nutshell, the Milionaires’ tax establishes a 9.9% tax on the amount of personal income that exceeds $1 million annually, with a number of exclusions. It will generate more than $2 billion annually that will support K-12 education, health care and the Working Families Tax Credit, primarily.

Washington’s regressive tax structure is less stable and more inequitable than the those of the 41 states that have a regular income tax. Our current structure, which relies predominantly on sales, business and occupation and property taxes, severely limits the amount of revenue that could be generated to meet expanding needs. Those who pay the most of state and local taxes as a share of their incomes are the people at the lower income brackets. These are the same people who lose services when funding falls short.

Budget cuts as an alternative to the Millionaires Tax would exacerbate the state’s financial problem, because the costs of ignoring social needs only makes them more costly. The adopted budget does include some cuts; prior budgets have reduced more. There is no “fat” available to cut.

These challenges with Washington’s tax structure have been acknowledged for  many decades. Ballot measures to pass an income tax have been rejected several times, most recently in 1982. The Millionaires’ Tax is not considered to be an income tax per se because it applies to such a limited population and has precedence in the court’s approval of the capital gains tax.

The LWVWA supported the Millionaires’ Tax bill because of our adopted position on state taxes is “action to obtain a balanced tax structure that is fair, adequate, flexible, and has a sound economic effect.” Also, many programs that the LWVWA supports would be hurt by any other option.

Before the tax bill went to the floor in both chambers, the public hearing turnout was historic. A staggering 80,000-plus people signing in pro and con. When the bill got to the House floor, an equally historic 24-hour debate ensued before the final vote.

This tax will likely be challenged in court. Meanwhile, it not only provides an improved revenue base but also can be the start of a process to make the entire tax structure more reliable, flexible and equitable.