Full Breakdown
Washington State Progressives Revise Millionaires Tax Bill, Removing Corporate Tax Break
2/28/2026, 9:48:06 PM
Key Changes to the Millionaires Tax Bill
The Washington State House Finance Committee has made significant revisions to the proposed income tax on households earning over $1 million, known as the "millionaires tax." A notable change includes the removal of a tax break that would have benefited large corporations, a decision driven by a coalition of 13 progressive lawmakers. This amendment, authored by Representative Shaun Scott (D-Seattle), was motivated by concerns that the tax break would cost the state approximately $550 million, undermining funding for essential public services such as education and child care.
The committee's vote to advance the revised bill was narrowly passed at 9-6, with all Republicans and one Democrat, Representative Amy Walen, opposing it. The bill is projected to generate nearly $2.6 billion for the state budget when fully implemented in 2029, with an estimated annual revenue of $3.4 billion from around 21,000 high-income filers.
Legislative Context and Implications
The revisions come amid ongoing debates about the adequacy of Washington's tax system, which many lawmakers argue is outdated and insufficient for modern needs. Representative Timm Ormsby (D-Spokane) emphasized the necessity of the millionaires tax to address the state's fiscal challenges, stating, “We have a broken, upside-down, hundred-year-old tax system that is just not adequate to meet the needs of our state in the 21st century.”
In addition to removing the corporate tax break, the committee expedited the repeal of a sales tax on services and included a sales tax exemption for diapers. These changes reflect a broader effort to provide tax relief to families and small businesses while ensuring that the state can fund critical services.
Official Statements & Responses
Governor Bob Ferguson expressed concerns that the bill still lacks sufficient provisions to return a significant portion of tax revenues to families and small businesses. He stated, “The version of the bill that passed the House Finance Committee still has a long way to go to meet this moment, and I am concerned we are running out of time.”
Supporters of the bill, including Representative Sharlett Mena (D-Tacoma), argue that it is essential for funding public services, stating, “It ensures that we have the resources to invest in early learning, child care, public education, health care, food assistance and workforce development programs.”
Criticism & Opposition
Opponents of the tax, including critics from the Washington Policy Center, argue that the state does not have a revenue problem but rather a spending problem, citing that the state budget has increased significantly over the past decade. They contend that the income tax will not resolve underlying fiscal issues and will lead to higher future deficits.
Representative Cyndy Jacobsen (R-Puyallup) articulated this viewpoint, asserting, “We’re taking as a premise that without this income tax, we can’t fund needed services... we have not solved the underlying problem, which is that we are spending more every year than we take in.”
What's Next
The revised bill will proceed to the House floor for a full vote, where further amendments are anticipated. Following this, it will return to the Senate for concurrence on any changes made by the House. The ongoing discussions reflect the urgency among lawmakers to finalize a tax structure that addresses both revenue needs and public service funding in Washington State.
