Washington State Imposes Millionaire Tax

The law will come into force on January 1, 2028, and tax collection will begin in 2029.

According to the Wall Street Journal, expected revenue from the new tax will exceed $3 billion a year.

Proceeds from the tax would be used to expand the Working Families Tax Credit, eliminate sales taxes on diapers, hygiene products and over-the-counter drugs starting in 2029, support preschools and free meals for students in kindergarten through 12th grade.

Democratic lawmakers are calling the package the most significant tax reform in state history. They present it as a step towards ensuring that those with more opportunities contribute more to common needs. Some private sector executives have backed the position that a focus on high incomes could prevent more onerous business tax hikes.

Previously, a similar law on millionaires was passed in California, which provoked a massive relocation of businesses to Texas, Florida and other states.