Steve Moore, co-founder of Unleash Prosperity, argues against high taxes that displace residents and proposes indexing capital gains on home sales for inflation on “The Bottom Line.”
Washington state GOP Chairman Jim Walsh is opposing Gov. Bob Ferguson’s proposed “millionaires tax,” warning it could impact more than just the state’s wealthy residents.
The millionaires’ tax was proposed in late December when Ferguson announced his support for a new 9.9% income tax on residents making more than $1 million a year ahead of the 2026 legislative session. It does not include people whose net worth reaches that amount, such as based on the value of their home.
Ferguson’s office sent out his proposal, saying the state ranks second to last in fairness and equality in the nation’s tax system. The governor said families with incomes in the bottom 20% pay 13.8% of their total income in taxes, while those with incomes in the top 1% pay only 4.1% of their income.
Gov. Bob Ferguson is proposing a millionaires’ tax on Washington residents who make more than $1 million. (Alexi Rosenfeld/Getty Images)
Ferguson is now urging the state to “rebalance this unfair system, give back money and lower taxes for working families and small business owners who have been hit hard by the affordability crisis.”
Ferguson’s office did not respond to multiple emails or a phone call seeking comment.
Walsh argued, according to Fox 13 Seattle, that the state Supreme Court justices could say it is unconstitutional for the state to tax only one group of people with an income tax. He said the move would clear the way for Democrats to impose an income tax on everyone, the newspaper reported.
Ferguson has said he will not lower the threshold for taxing anyone under $1 million a year.
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“We don’t buy it, no one buys it,” Walsh said.
Washington State GOP Chairman Jim Walsh is opposing Gov. Bob Ferguson’s proposed “millionaires tax.” (Karen Ducey/Getty Images)
A Analysis by the Tax Authorities found that the proposed tax would impose a top rate of more than 18% on Seattle-based payroll income and restricted stock units (RSU), making it the highest rate in the US. The group said very few people earn salaries over $1 million; incomes at that level arise from capital gains and dividend income, pass-through corporate income and RSU vesting.
The Tax Foundation also said the proposed tax would hit small business owners and technology workers who receive RSUs in compensation the hardest. Washington state has done so 695,695 small businesses and almost 360,000 employees in technology-related jobs, according to the Small Business Administration and the Washington State Department of Commerce, respectively.
“Such an aggressive tax would do real damage to Washington’s economy, sending jobs and economic opportunity elsewhere,” wrote Jared Walczak, a senior fellow at the Tax Foundation. “Especially for significant parts of the state’s technology sector, which is already the target of abnormally high business taxes, a 9.9 percent income tax could be the final straw, spurring any subsequent expansion into other states and potentially taking existing jobs with it.”
A view of Olympia, Washington, the state capital. (iStock)
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Ferguson argued that revenue from this tax should go toward providing more K-12 funding to strengthen Washington students’ access to a world-class education and eliminating sales taxes on essential personal hygiene products such as shampoo, deodorant and toothpaste; essential baby products, such as diapers, wipes and infant formula, or essential and affordable clothing items.
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