It’s the oldest trick in politics: sell a major policy shift by assuring voters it only targets someone else. Olympia is now running that play with the 9.9% “Millionaire Tax.” For those of us who have watched Washington’s spending habits for decades, the warning signs are obvious. The “fair share” narrative depends on intellectual dishonesty—and it’s being used to wedge open the door to a permanent general state income tax.
Lie # 1: The “Targeted” Trap
The most obvious whopper in this whole façade of a proposal is that the tax will be reserved strictly for those earning over $1 million. History suggests otherwise. Look no further than Washington’s new capital gains income tax, which lawmakers hiked and expanded just three years after its inception. We were also told that the 2021 capital gains tax was not an income tax, and that under no circumstances would it lead to one.
The pattern of rate and bracket expansion mirrors the federal income tax, which began in 1913 with a top rate of 7% on the ultra-wealthy, and California’s system, which now captures the middle class with some of the highest marginal rates in the country. This is the “give a mouse a cookie” rule of government: if you give them a “millionaire tax” today, they’ll be coming for your middle-class paycheck tomorrow.
Lie # 2: Capital Flight Doesn’t Matter
The proponents claim taxpayers won’t leave, but according to the Tax Foundation, nearly two-thirds of the high-tax jurisdictions in the U.S. experienced net outbound domestic migration in 2024, as residents—particularly high-income residents— continued to favor lower-tax alternatives. When the wealthy leave, they don’t just take their personal fortunes, but the businesses, jobs, and all the categories of state and local taxes they were already paying, leaving the rest of us to pay the bill for a budget that has grown far beyond its means.
We’ve already seen this with Jeff Bezos moving to Florida after the capital gains tax passed—how many more “golden egg” layers can we afford to lose? In addition, the more progressive a tax is, the more middle and low-income taxpayers are needed to replace taxpayers that migrate from the top brackets. Research from the UK-based Adam Smith Institute has found that it takes approximately 49 middle-income taxpayers to replace the revenue lost by just one departing millionaire.
Lie # 3: “Every Other State Has One”
The oft-repeated line that 41 other states have an income tax and they do “just fine” ignores Washington’s unique “tax-stacking” problem. Other states don’t have our record-high minimum wage ($17.13 per hour), the nation’s highest estate tax, the third-highest gas taxes in the country, or the unique burden of the Business & Occupation (B&O) tax, which is charged on every dollar a business brings in, even if they are losing money. Washington is one of only 13 states with a taxpayer-funded Paid Family Leave program and the only one with the WA Cares long-term care tax—a mandatory deduction from your check for a benefit most people will never actually use.
Lie # 4: The “Fair Share” Fiction
The claim that the bottom 20% of Washington households pay 13.3% in state and local taxes is one of those statements that’s true in the narrowest sense and false in every way that matters. State and local taxes, of course, do not occur in a vacuum. For every tax dollar paid, those same households receive $6.17 in government transfer payments like Social Security, SNAP, Medicaid, housing subsidies, and refundable credits.
According to the Tax Foundation, this equates to a combined tax and transfer rate of negative 127%, meaning that for each dollar earned, they received $1.27 in government benefits, while the top quintile had a rate of 30.7%, meaning after tax and transfer payments, they paid just under 31 cents for every dollar earned. The best lies are mostly true—and this one works only by pretending transfers, credits, and subsidies don’t exist
Lie # 5: Constitutional Contortions
Washington voters have rejected an income tax at the ballot box 10 straight times over the past century. In a particularly offensive display of legislative indifference, over the last two years, lawmakers approved the largest tax package in Washington state history, while consoling voters by preemptively adopting a voter-backed initiative to ban state and local income taxes—a promise that’s worth less than the paper it’s printed on. The current income tax proposal also includes an emergency clause, even though the tax would not go into effect until 2028. The only “emergency” is preventing a citizen referendum on a policy voters have repeatedly opposed.
Perhaps most troubling is the blatant disregard for the meaning of words and the state Constitution itself, which explicitly requires that all taxes be uniform upon the same class of property. For nearly a century, Washington courts have held that income is property—a legal reality that effectively bars a graduated income tax. Yet, proponents of this bill openly admit their goal is to lead the state Supreme Court to reverse its Depression-era precedent, essentially treating the Constitution as an obstacle to be bypassed rather than an authority to be upheld or modified via the legal process required to do so.
Lie # 6: An Income Tax as State Budget Panacea
Income taxes are volatile—especially high-earner ones. Adopting a high-earner tax will make a significant portion of the state’s budget subject to economic mood swings. And of course, it will do nothing to address the real problem: Washington’s spending trajectory has become fundamentally untethered from any kind of fiscal or policy limits. In the last decade, state spending has increased 116%, more than double the rate of inflation and population growth. Relying on the volatile income of high earners only guarantees wild revenue swings that will lead to more “emergencies” and more tax hikes down the road.
Lie # 7: This Version Is the “Best They Can Do”
If legislators are going to do this, they could at least offer some meaningful tax relief. There are many options, and none of them stop at a sales tax exemption on hygiene products, like the current proposal. They should index all deduction caps for inflation, eliminate the marriage penalty that treats a couple’s combined income as a single individual’s, and add an annual “capital flight” reporting requirement to track exactly how many high-income taxpayers are migrating.
This tax proposal is not a budget fix any more than taxpayers are an ATM. A “Millionaire Tax” is nothing but pure marketing, and if you believe otherwise, then I have a bridge to sell you.
Amber Gunn is a Senior Policy Analyst for the Mountain States Policy Center, an independent research organization based in Idaho, Montana, Eastern Washington and Wyoming. Online at mountainstatespolicy.org.
