Washington's 'millionaires tax' advances in state Senate with some changes

Jim Brunner, The Seattle Times on Feb 10, 2026

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SEATTLE — A proposed Washington income tax on people earning more than $1 million has cleared its first legislative hurdle, with the Senate Ways and Means Committee passing the plan Monday — with some tweaks.

Majority Democrats pushed through what they've dubbed the millionaires tax" on a largely party-line vote, after agreeing to some changes aimed at appeasing Gov. Bob Ferguson and other critics.

The new version of Senate Bill 6346 keeps in place the main thrust of the proposal: a 9.9% tax on annual earnings above $1 million, starting in 2028. That would bring in about $3.5 billion a year, affecting about 30,000 taxpayers, according to legislative staff estimates.

The amended bill boosts a tax break for small businesses, exempting firms with gross revenues of $300,000 or less from the state business and occupation tax, and giving some relief for businesses grossing up to $600,000.

Senate Majority Leader Jaime Pedersen, D-Seattle, the bill's chief sponsor, said that would exempt more than 70% of small businesses from the state B&O tax.

The revised bill also doubles the charitable deduction to $100,000 and adds a deduction for commercial fishing firms that set aside money to repair or replace boats.

Democrats voted to move the bill ahead for a possible vote next week by the full Senate, while stressing that further changes may be considered to add tax breaks for employers and families.

Sen. Yasmin Trudeau, D-Tacoma, said the income tax proposal is about "making things more fair" by targeting wealthy residents whose fortunes have grown "exponentially greater than those at the bottom."

"It is trying to level that playing field," Trudeau said.

While most Senate Democrats signed onto the bill as co-sponsors, there are a few holdouts. Sen. Drew Hansen, D-Bainbridge Island, said he's taking a neutral stance for now, and voted "no recommendation" Monday.

Hansen said he's "open to the idea," but agrees with Ferguson that the income tax bill should include more tax breaks "to make life in this state affordable for working families."

Ferguson has endorsed the concept of a millionaire's tax, but surprised Democratic legislative leaders last week with demands for changes in the proposal, saying he wants to see more tax relief for working people and businesses.

A spokesperson for the governor did not immediately respond to a request for comment Monday on whether the revisions to the bill were adequate.

Republicans unsuccessfully proposed several amendments to the bill, including efforts to delay the tax, add a sales tax exemption for diapers, and require a public vote on a state constitutional amendment.

Senate Minority Leader John Braun, R-Centralia, said the tax bill would be bad for the state, and pointed to voters' repeatedly rejecting proposed income taxes in the past.

"It ignores the will of the people. It ignores the economic impact it's going to have on our state and absolutely picks winners and losers," Braun said.

Sen. Chris Gildon, R-Puyallup, said the people of Washington "are savvy enough not to be fooled by this ruse ... They know that an income tax on anyone is eventually going to be an income tax on everyone in our state.

The revised bill approved by the committee also made some shifts to how the money raised by a new high-earners income tax would be spent.

The substitute bill would send 7% of the income-tax proceeds to a new fund to help cities and counties pay for escalating public defense costs. The original version spent 5% on public defense, but only aided counties.

The rest of the billions raised by the new tax would flow to the state general fund, which pays for K-12 schools, human services, prisons and other state agencies.

The committee vote Monday came quickly after a Friday afternoon public hearing on the measure, which drew a packed crowd of supporters and opponents.

Monday's action moves the tax proposal ahead toward a vote of the full Senate. The deadline for bills to pass out of their chamber of origin is Feb. 17.

The legislative session is scheduled to end March 12.