Olympia is buzzing with news about the millionaire’s tax, as it heads to the House after passing the Senate. Governor Bob Ferguson has signaled that he wants significant changes before he will consider signing it.
The tax proposes a 9.9% rate on income over $1 million. Ferguson wants to ensure that any revenue generated goes back to Washington families and small business owners. He believes that addressing the affordability crisis is crucial, especially in these challenging times.
One of Ferguson’s ideas is to allocate $1 billion in tax revenue for small business tax cuts. He also advocates for expanding sales tax exemptions for basics like diapers, and introducing a sales tax holiday for items under $1,000 twice a year. Moreover, he wants to increase the Working Families Tax Credit to help low- to moderate-income families.
Ferguson made it clear: “Any bill I sign must send a significant percentage of the revenue back.” However, when asked about vetoing the proposal if his changes aren’t made, he did not commit firmly.
Some critics express concern that the tax might push high earners and businesses to leave the state. Ferguson downplayed this worry, stating he hasn’t seen evidence of it. In his conversations with businesses, he finds that the overall tax climate is more about a range of issues than any single tax.
On the other hand, Collin Hathaway, founder of Skylight Capital, disagrees. He highlighted that many are already leaving cities like Seattle for places like Bellevue, citing tax policies, crime, and cost of living as driving factors. Hathaway’s experience suggests that businesses are feeling the pressure, and as they look to grow, Washington is becoming less attractive.
The bill now awaits discussion in the House of Representatives. Both the Senate and House need to reach an agreement by March 12. Governor Ferguson’s goal remains clear: making life more affordable for Washingtonians.
Experts say that taxes can heavily influence where businesses choose to locate, and local economies can shift dramatically based on policy decisions. As debates continue, the ultimate impact of this proposed tax will unfold in the coming months, shaping both business growth and residents’ daily lives.
For a deeper dive into the economic implications of taxation, you can read insights from the Tax Foundation, a reputable source on tax policies and studies.
