Why I Support the New Washington State Income Tax

What a new Washington State income tax on high earners would mean for the rest of us.

Every coin on this table represents a share of what someone paid to live here. In Washington, that share is distributed anything but equally. The new WA State Income Tax, dubbed “Millionaires” tax, would help make our tax system be less regressive.

Washington just passed something historic. Here's why I think it matters for housing, schools, and who gets to stay in this city.

I have been selling homes in Seattle for four years, and the question I get more than almost any other is some version of this: Is it still worth it to stay in Seattle? 

Sometimes people mean financially. Sometimes they mean something that's harder to quantify. They mean: is this city still something I want to be part of?

There's been a lot more noise about that this week, especially in the real estate world, as many high-earning peers and influencers on social media have been speaking out against the "Millionaire's Tax."

On March 10, the Washington State House passed State Bill 6346, a 9.9% tax on household income above $1 million a year. Governor Ferguson has said he'll sign it. And tonight, as I was writing this post about my support for the new tax, the state Senate passed their own version of the bill. For the first time in our state's history, the highest earners will pay something closer to what the rest of us have been paying all along. I want to talk about what this actually means, because the noise has been loud and the data has been largely absent from the conversation.

Here's the thing about Washington's tax system that most people don't say out loud - it is one of the most regressive in the country. The bottom 20% of households currently pay 13.8% of their income in state and local taxes. The wealthiest 1% pay 4.1%.

That inversion isn't an accident. It's the result of a system built almost entirely on sales tax and property tax, which hit lower-income households proportionally harder.

The bottom 20% of Washington households pay 13.8% of their income in state taxes. The top 1% pays 4.1%.

SB 6346 doesn't fix that entirely, but it starts to correct it. Only about 21,000 tax filers in the entire state will pay the new rate.

Everyone else sees the benefit, including expanded Working Families Tax Credits, sales tax eliminated on personal hygiene products and over-the-counter medications, more funding for K-12 schools and early childhood programs, and expanded access to child care.

For people trying to plant roots here, those things are not abstract. Child care costs in Seattle are among the highest in the country. Public school quality is one of the things home buyers care about the most. The affordability crisis in this city is not just about home prices. It's about whether the infrastructure around a home, the schools, the services, the stability, is there to support a livable quality of life.

I also want to address the main objections I see repeated online, without any data, in nearly every comment section. Because the opponents are making a lot of noise, but the volume doesn’t make their claims true.

1. "Wealthy people will just leave, taking their tax revenue with them."

We already ran this experiment. When Washington's capital gains tax took effect in 2022, critics made identical predictions. What actually happened in the two years that followed:
+47%Growth in Washington's millionaire population, 2022-2024
$1.2BRaised by the capital gains tax in its first two years
+$748BIncrease in collective wealth held by WA millionaires

Massachusetts passed a 4% millionaires surtax the same year. Same warnings. In the two years that followed, their millionaire population grew by 38.6% and the tax generated $5.7 billion, more than double what was projected. That money went to schools and transportation.

The academic research is consistent and worth citing. The largest study on millionaire migration tracked 45 million tax records from every million-dollar earner in every state over 13 years. It found that millionaires move at a lower annual rate (2.4%) than the general population (2.9%). The group most likely to leave a state for economic reasons earns around $10,000 a year, not $1 million. High earners are embedded in the places where they built their wealth: local clients, business relationships, networks that took decades to develop. Moving means starting over.

Some people may leave. A few high-profile departures will be held up as proof. But the net effect on the data has consistently been growth, not exodus. And the ones already heading to Florida? They'll be back. Our climate is more livable long-term, and they know it.

2. "This is just the beginning. They'll lower the threshold until they're taxing everyone."

This is one of the most apocalyptic arguments of the four, and its framing is designed to bypass scrutiny rather than invite it. By that logic, we shouldn't set any law at all, because any law can theoretically be amended. That's not a specific concern about this bill. That's an argument against having a legislature.

But here's what's actually in the bill that critics are purposefully ignoring. During the floor debate, Democrats accepted an amendment that ties the tax's legal mechanism directly to the $1 million threshold. The bill only functions as long as the standard deduction stays at $1 million or above. Lowering the threshold wouldn't just be a political decision -- it would require new legislation that breaks the existing structure entirely.

It's also worth noting that 41 other states already have income taxes, including deeply red states like Alabama, Georgia, and Mississippi. None of them have collapsed into punishing the middle class. The slippery slope argument is emotionally resonant but historically and rationally falls flat.

3. "It's unconstitutional. The courts will kill it."

A legal challenge is almost certain, and Washington has a complicated history with income taxes. But "it will be challenged" and "it will lose" are two very different statements, and the certainty with which opponents are asserting the latter isn't supported by the actual legal landscape.

SB 6346 is deliberately structured as an excise tax on the receipt of income, using the same legal framework that the Washington Supreme Court upheld 7-2 in Quinn v. State in 2023 -- the ruling that validated the capital gains tax. The lawyers who drafted this bill read that decision carefully. The bill follows its blueprint. There is real legal uncertainty ahead, but it is uncertainty, not a foregone conclusion.

And, if opponents are so sure it will be struck down, what are they worried about?

4. "It'll hurt businesses and kill the economy."

The bill cuts taxes on small businesses as part of the same package. Businesses grossing $300,000 or less annually will now pay zero state B&O tax. Those under $600,000 qualify for a credit. The B&O threshold doubles. The design of this bill explicitly shifts burden toward the top while reducing it at the small business level. This legislation is designed to help the economy.

On the broader economic argument: Kansas tried the opposite approach in 2012, implementing one of the largest income tax cuts in state history on the premise that lower taxes generate growth. The state fell behind neighboring states economically, faced significant revenue shortfalls, and reversed the experiment five years later. Washington and Massachusetts raised taxes on high earners and saw their economies and millionaire populations grow in the years that followed. The "taxes kill economies" narrative has a long political history. It doesn't have much of an empirical one.

5. "The state already mismanages its current funds. Why give it more?"

This one sounds like fiscal responsibility but it's actually a deflection -- it swaps a conversation about revenue for a conversation about management, and uses one to avoid the other.

Demanding accountability from government is reasonable. It's necessary. But "they might mismanage it" is not an argument against funding schools and child care. It's an argument for better oversight. Those are two different conversations, and one doesn't cancel out the other.

Underfunded schools don't get better by staying underfunded while we wait for perfect management. The answer to mismanagement is accountability, not austerity. Plus guess what oversight usually requires? Resources.

My final thoughts

I got into real estate because I believe in what a home represents: stability, community, a stake in a place. I grew up in Seattle when it was still affordable to live and raise a family on one income. I've watched what happens to neighborhood after neighborhood when the infrastructure around it can't keep up with its growth, when schools are underfunded, when the people who make a city work can't afford to live in it.

SB 6346 is not a perfect bill. The court challenge ahead is real. But it is a serious attempt to ask our highest earners to contribute at a rate closer to what everyone else already pays, and to direct that revenue toward the things that make it possible for people to actually build a life here.

That feels worth paying attention to, regardless of where you land on it politically.

I'm happy to talk about this more, and even happier to talk about what it might mean for you if you're thinking about buying or selling in Seattle right now.

Let’s work together

If you've made it this far, you probably care about doing this right. That's exactly the kind of buyer or seller I love working with.

I brought 20 years of business experience to real estate for one reason — I believed people deserved better guidance on one of the biggest financial decisions of their lives. The last four years have been about delivering on that, one client and one transaction at a time. My approach is built around education and empowerment, so you always know where you stand and what comes next, whether you're buying your first home or selling one you've loved for years.

If you're ready to approach your next move with this kind of clarity and intention, and you want someone who treats your transaction with genuine care and rigor, I'd love to be part of that process. You deserve to feel confident and informed at every step, not just at the end. Reach out and let's start the conversation.