After a grueling 25 hours of debate on the House floor, complete with an almost show-stopping filibuster effort of more than 81 amendments by Republicans to stop the bill from moving forward, Washington made history this week with the passage of a millionaires tax bill, which would create the first income tax in the state’s history.
On March 9, lawmakers passed a 9.9% tax on personal income above $1 million per year—a first for the income-taxless state. The final vote was 52–46, and involved the longest floor debate in Washington history, far exceeding the previous record of nine hours.
“We knew it was going to be a pretty major endeavor,” Rep. Brianna Thomas, a Democrat who supported the measure, told Fortune. “We’ve got 93 years of precedent in front of us, behind us, around us at all times on the conversation around an income tax.”
Washington was one of only nine states with no income tax, and has operated on essentially the same tax structure—reliant solely on sales and business taxes—since it was built on an agrarian, timber, and shipping economy in the early 20th century. Washington last voted on an income tax in 1932, when it passed overwhelmingly, only to be struck down by the state Supreme Court a year later on the grounds that income is classified as property under the state constitution, requiring a uniform taxation scheme. In 2010, state legislators attempted to introduce another income tax, only this one didn’t even come close to passage.
For Thomas, the economy has simply outgrown the code. Washington has now become the home of global multitrillion-dollar organizations Amazon, Microsoft, and Boeing, and it’s staring down a projected budget deficit of $10 billion to $12 billion over the next four years.
“Washington state was originally built on an agrarian and timbered economy,” she said. “We still have a tax code based on apples and cherries while building some global-leading technology every which way you throw a rock.”
The result is a tax structure that economists have consistently ranked among the most regressive in the country. According to the Institute on Taxation and Economic Policy, the top 1% of earners in Washington pay just 4.1% of their income in state and local taxes. The bottom 20%, however, pay 13.8%.
“We’ve got more millionaires and billionaires than we’ve ever had, and they’re paying, effectively, a 4% tax rate,” Thomas said. “Meanwhile, you got working folks paying 11% of their income, and the lowest-income people paying 14%. Isn’t it unfair for those who have the most, to pay the least, and those who have the least to pay, the most, proportionally?”
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