Pro: Millionaires income tax would fix WA’s broken, unfair system | Opinion

For too long, working people in Washington state have paid a disproportionate amount of their income in taxes for the services we all rely on. That must change, and we have a historic opportunity to do just that this session.

It’s painfully clear too many Washingtonians are struggling to make ends meet, and our broken tax structure is failing to keep up with the needs of working families. Washington families with income in the bottom 20% pay 13.8% of their total income in taxes, while those with income in the top 1% pay only 4.1%. Only Florida has a tax structure that favors the rich more.

That’s why I’m sponsoring SB 6346, or the Millionaires Tax, this session. The narrow, targeted proposal would levy a 9.9% tax on income above $1 million and be paid by less than 1% of the wealthiest households in Washington. It would generate an estimated $3.7 billion per year to help fund public schools, health care, public safety and other needs that working families care most about.

Asking the ultrawealthy to pay a little more would begin to fix a nearly century-old structural problem in our state’s tax system. The essential services we all depend on will continue to face cuts in the state budget if we continue to rely on high sales and property taxes, which strain family budgets and limit the state’s flexibility.

That’s why as part of the Millionaires Tax, we will also eliminate sales taxes on personal care products, such as shampoo and deodorant; reduce taxes on small businesses; and expand the Working Families Tax Credit. These ideas are baked right into the bill, so when the Millionaires Tax goes into effect, every Washingtonian will get a tax cut.

People across the state understand more and more about the structural budget problem we face. They also have a strong sense of how unfair our tax system is. That’s why Democrats passed the state’s first-ever capital gains excise tax in 2021 to take a modest step toward balancing our tax code while funding early learning and child care.

In 2024, nearly two-thirds of people voted to uphold the capital gains tax, which opponents loudly proclaimed to be an income tax. The landslide victory saw voters approve the tax in 32 out of 39 counties. It’s clear Democrats, independents and even many Republicans are frustrated with a tax system rigged against working-class families.

This is not a radical idea — 41 states have a personal income tax, and in many of those states, the tax burden for individuals, particularly for those making more than a million dollars, is higher than 9.9%.

To be clear, this proposal isn’t the solution to the short-term budget problem facing the Legislature this session, but it is essential if we want to solve the long-term budget shortfall permanently and eventually lower regressive taxes on middle-class households.

While there is growing momentum to pass the Millionaires Tax during this year’s 60-day session, major hurdles will remain on the horizon. There’s little doubt it will be challenged in court, and voters will likely have the final say when opponents attempt to repeal it through a ballot initiative.

But after decades of inaction, I firmly believe now is the time for the Legislature to make a momentous fix to our broken tax structure, making life more affordable for working-class people and protecting what makes our state such a great place to live, work and raise a family.

Jamie Pedersen is the majority floor leader in the Washington Senate and serves the 43rd Legislative District.

Editor’s Note: This article first appeared in the Seattle Times.