Millionaires as a Tax Target — Washington & California

As Weekly Industry News noted last week, Washington Legislature passed a tax on millionaires just before it adjourned. Washington’s tax starts in 2029 and will focus on 2028 income. The law puts a 9.9% tax on all incomes over $1 million.

The state’s governor, Bob Ferguson said he’ll sign the bill into law. By the time you read this story, he may have already signed the bill. Ferguson said the push to tax millionaire income is his idea.

“I called for something truly historic — a tax on incomes over $1 million, paid by less than one half of one percent of Washingtonians. The Legislature delivered,” Ferguson said in his closing statement on the work of the 2026 Washington Legislature. “Now, we have a Millionaires’ Tax that sends money straight back to Washington families by expanding the Working Families Tax Credit to 460,000 additional households, and provides substantial relief for small business owners. It also saves working parents money, and ensures our kids are prepared to learn by investing in affordable childcare and funding free breakfast and lunch for all Washington K-12 students. That has been a priority of mine since I ran for governor.”

Upon passage of the law, one of the one-half of one-percenters, and one of the state’s richest citizens, Starbucks founder, Howard Schultz announced he’ll be moving to Florida and his company’s headquarters will go to Tennessee.

There are challenges. The biggest is Washington’s constitution that prohibits an income tax. A lawsuit will no doubt be filed and the state’s Supreme Court will definitely be looking at the bill’s constitutionality.

Washingtonians will also likely see an initiative petition to repeal the Legislature’s decision.

California’s Legislature stayed out of the issue but Golden State voters will look at a wealth tax on the ballot in November. This one will put a one-time 5% tax on the ultra-wealthy living in California.

A UC Berkeley Citrin Center for Public Opinion Research-POLITICO poll says half of those polled will vote for the tax with 28% opposed. The survey does indicate that most of those polled will listen very hard to counterarguments and will likely agree with them.

The tax is opposed by California Governor Gavin Newsom and supported by Vermont Sen. Bernie Sanders. Newsom says it will continue to drive wealthier taxpayers out of the state.

Here’s more from the poll:

• 56% do not see the tax remaining temporary
• 54% think such a tax will see wealthy individuals leaving California
• 63% say such a tax will push businesses out of the Golden State
• 59% see it eventually leading to a loss of revenue for the state
• 67% worry the middle class living in California will be taxed to make up for those losses

On other topics:

• 85% believe the state wastes tax dollars
• 57% say they pay more taxes than they should

Source: Google AI, Weekly Industry News

Source link: The Washington Standard — https://bit.ly/4rDbhpI

Source link: Insurance Journal — https://bit.ly/3N6z6Z6

Source link: Politico — https://bit.ly/47yTQzu