Washington state lawmakers have passed a new bill imposing a 9.9% tax on incomes exceeding $1 million, set to begin January 1, 2028. This significant policy shift marks a departure from the state's traditional no-income-tax stance, potentially raising billions annually and sparking a substantial challenge from wealth advocacy groups. For executives, this signals a potential trend in state-level tax policy, impacting high-net-worth individuals and potentially influencing where businesses and talent choose to locate.
Key Intelligence
- •Washington state, known for having no income tax, is now taxing earnings over $1 million at 9.9%.
- •The new 'millionaire tax' is slated to take effect on January 1, 2028, after several years of debate.
- •Forecasts suggest the tax could generate billions in annual revenue for the state.
- •The legislation is expected to face fierce opposition and legal challenges from the 'wealth defense industry'.
- •This move could serve as a model for other U.S. states considering new ways to tax high-income earners.
- •The tax will apply only to a small segment of Washington residents, those earning above the $1 million threshold.