Washington state voters will decide in November whether to repeal the state's newly enacted tax on high earners, after Initiative 645 received enough valid signatures to qualify for the ballot, a spokesperson for Secretary of State Steve Hobbs confirmed to the Seattle Times. The measure would eliminate Washington's 7% capital gains income tax on households earning more than $1 million per year, which was approved by the Democratic-controlled legislature and signed into law in 2023.
The state Department of Revenue estimated the tax could generate approximately $500 million annually once fully implemented. Washington is one of nine states without a broad personal income tax, making this measure a significant departure from the state's long-standing tax structure.
What the Right Is Saying
Business groups and fiscal conservatives argue the tax drives wealth out of the state and harms economic competitiveness. They contend that Washington's lack of a broad income tax is a key competitive advantage that has attracted businesses and residents for decades.
The Association of Washington Business warned that the tax creates uncertainty for employers and could accelerate departures by high-net-worth individuals to states like Florida or Texas, which have no income taxes. 'Washington's job creators and their employees are watching closely,' said AWB President Kris Johnson in a statement. Republican legislators who opposed the original measure say voters should have the final say on whether such a significant tax change aligns with state values.
What the Left Is Saying
Democratic lawmakers and progressive advocacy groups have defended the tax as a matter of fiscal fairness, arguing that wealthy residents should contribute more to fund essential public services. They note that Washington's reliance on sales and property taxes disproportionately burdens lower- and middle-income households.
Washington State Treasurer Mike Pellicciotti said the revenue from the high-earner tax is critical for funding schools, infrastructure, and behavioral health programs. 'This is about ensuring those who have benefited most from our state contribute their fair share,' he said in a statement. The Washington State Budget and Policy Center has argued that repealing the tax would shift an estimated $500 million in annual tax burden onto working families.
What the Numbers Show
The Washington State Department of Revenue projects the millionaire's tax will generate between $447 million and $515 million annually once fully operational, affecting approximately 7% of Washington households. The original legislation passed the Senate in April 2023 on a party-line vote, 28-21, with all Democrats supporting it and all Republicans opposed.
According to state elections data, Initiative 645 submitted more than 420,000 signatures, well above the required threshold of approximately 324,000 valid signatures for a measure of this type. The Secretary of State's office validated the signatures after a random sample verification process typical for Washington ballot measures.
The Bottom Line
Washington voters will now weigh in on one of the most significant tax policy debates in state history. If Initiative 645 passes, it would eliminate revenue that Democrats have already factored into current budget projections. Lawmakers and advocacy groups on both sides are expected to launch extensive campaigns ahead of the November election, with opponents of repeal warning of cuts to public services and supporters arguing for economic freedom and competitiveness. The outcome could set a precedent for other states considering similar wealth-based taxation measures.