(The Center Square) – Members of the House Finance Committee on Tuesday held another contentious and lengthy public hearing on a proposed income tax for Washington state.
Senate Bill 6346, also known as the “millionaire’s tax,” proposes a 9.9% tax on personal income exceeding $1 million annually for individuals and households.
If passed, the new income tax would take effect on Jan. 1, 2028, with the first payments due in April 2029, although legal challenges are expected and the issue is likely to end up before the Washington Supreme Court.
Two years ago, lawmakers overwhelmingly approved Initiative 2111, prohibiting the state as well as local jurisdictions from imposing or collecting personal income taxes.
As Tuesday’s hearing opened, the prime sponsor of SB 6346, Sen. Jamie Pedersen, D-Seattle, urged the committee to back the legislation.
“I’m thinking, as I sit here, really about my kids … what kind of a future I want for them,” he said, suggesting the tax code is unfair and the wealthy should pay their share.
After Pedersen’s testimony, Committee Chair Rep. April Berg, D-Mill Creek, addressed media reports of duplicate sign-ins on the bill’s legislative page where citizens can add their names to the “pro” or “con” list on bills.
“We have had it seems manipulation of our public comment system,” Berg confirmed. “Initial review indicates that there are over 19,000 duplicate records and over 200 people have been fraudulently signed in on the bill without their knowledge.”
Rep. Ed Orcutt, R-Kalama, the ranking minority on the committee, expressed his concern about potential manipulation of the system.
“But I still think it’s important to note there are more than 100,000 unique individuals who have signed in with concerns about this bill,” Orcutt pointed out.
Berg warned members that given the high volume of people wanting to speak, she was not going to allow any lawmakers to question testifiers or staff.
The next hour and 45 minutes brought testimony for and against the bill, starting with union members who filled the hearing room with colorful matching scarves representing their various labor groups.
“Our tax code is broken,” said April Sims, president of the Washington State Labor Council. “It’s a century-old artifact that has failed to provide a stable foundation for you all to build a state that Washingtonians deserve.”
Max Martin with the Association of Washington Business told lawmakers the “real world impacts” of the bill will be far more consequential than just hitting millionaires.
“In practice, it’s a tax aimed at individuals. It’s a new tax on employers, including businesses that may have a good year on paper, but need the cash to reinvest into their business or weather volatility,” he explained. “This is also coming at a time when many employers are still absorbing last session’s operating cost increases.”
Last year, the Legislature passed increased business and occupation taxes, new surcharges and expanded service taxes.
Jabe Blumenthal, former Microsoft employee and designer of Excel, testified in support of the proposed income tax, which he said he will be paying if it becomes law.
“I’ve heard it suggested that the willing wealthy can just voluntarily donate to the state,” he said. “Sure, maybe 10% would do so. And we could likewise try to fund public schools or roads or the police with voluntary bake sales. It’s not a serious suggestion. We need tax policy where all rich people, not just those who want to are required to pay their fair share.”
Adrien Jones was one of the last to testify in opposition to the bill.
“We don’t need more taxes,” she said. “We need Washington state to learn how to budget. Stop making it rain with our tax dollars and learn to budget.”
Anti-tax activist Tim Eyman suggested that Pedersen made phone calls to Supreme Court justices to “bully them” into upholding the income tax, assuming it becomes law.
“That is corruption,” said Eyman, whose microphone was them muted by the committee chair.
During Tuesday’s Democratic leadership media event, Pedersen was asked directly if he had any contact with Supreme Court justices about the income tax.
He emphatically denied it.
During that same event, The Center Square asked leadership if their job as lawmakers is to introduce bills that they know are constitutional, or if it’s their job to “push the envelope” on that.
Pedersen responded to say the 1933 decision from the State Supreme Court that said income is property, and must be taxed at a uniform rate, came at a time when “there was a lot of unsettledness about the nature of an income tax … we are the only place that considers an income tax to be a property tax.”
On Friday, the bill be in executive session before the same committee that will review, possibly amend, and vote on whether to report the bill to the House floor. If approved, it moves to the floor for further debate and a chamber-wide vote.
