Gov. Ferguson says he would support a ‘millionaires tax’ in Washington state
OLYMPIA, Wash. — Washington Gov. Bob Ferguson said Tuesday that he would support a proposed “Millionaires’ Tax” on high-income earners, signaling a significant shift in the state’s tax debate while acknowledging the proposal would almost certainly face a legal challenge.
Speaking during a nearly hour-long press conference unveiling his supplemental budget, Ferguson said a tax on individuals earning more than $1 million annually could generate an estimated $3 billion per year in new revenue. He emphasized, however, that the proposal would be narrowly targeted and would not apply to most Washington residents.
“I want to be clear that I will not support income tax for people who make less than $1 million in a year,” Ferguson said. “Progressive tax reform cannot just mean increasing contributions from those who can afford it. We must use the gains from the millionaires tax to return money directly to working families and small business owners who have been hit hard by the affordability crisis.”
Legal hurdles remain a major obstacle
Ferguson acknowledged that any form of income-based taxation would likely face a court challenge, citing long-standing rulings by the Washington State Supreme Court, which has historically interpreted income as property under the state constitution. That interpretation has effectively barred graduated income taxes without a constitutional amendment.
He also pointed to Initiative 2111, passed with bipartisan support in the Legislature, which explicitly bans state and local income taxes. While supporters of a millionaires’ tax argue it could be structured differently to withstand scrutiny, Ferguson conceded the legal landscape remains uncertain.
Payroll tax proposal rejected
During the press conference, Ferguson rejected an alternative idea floated by Shaun Scott, which would impose a statewide payroll tax on large companies. The governor said he was not a fan of that approach, suggesting it could have unintended consequences for employers and workers alike.
Budget focuses on cuts, not broad tax hikes
Ferguson’s proposed supplemental budget seeks to close a significant budget gap without widespread tax increases. The plan avoids furloughs of state employees but could result in job reductions tied to nearly $800 million in departmental cuts across state government.
In addition, Ferguson is calling for the withdrawal of $1 billion from Washington’s rainy day fund to stabilize finances during the current budget cycle. He maintained that, taken as a whole, the budget would avoid raising taxes on the general population while prioritizing fiscal restraint.
A renewed debate over tax policy
Ferguson’s endorsement of a millionaires’ tax is likely to reignite debate in Olympia over how Washington funds public services amid rising costs and affordability concerns. While supporters argue the tax would bring fairness to the state’s revenue system, critics warn of legal risks and potential impacts on investment and economic competitiveness.
As the legislative session continues, lawmakers are expected to weigh the proposal alongside broader discussions about spending cuts, reserve funds, and the future of tax policy in Washington state.
