Seattle Times recommends ‘No' on I-645, ‘millionaires tax'

Earlier this year, Democratic state lawmakers passed a new tax targeting the state's highest wage earners: those who take home $1 million or more a year. Supporters argued it would restore the state's fiscal footing and rebalance its regressive tax code, shifting some of the financial burden away from those with the least ability to pay to ones who have the most. The policy, SB 6346, failed on the Democrats' promise to deliver sufficient tax relief to lower income Washingtonians. But the answer to what ails it is not Initiative 645. Instead, the initiative would ultimately worsen Washington state's budget problems, producing deeper cuts to state services and likely spurring further, more damaging tax hikes in coming years. The initiative doesn't cleanly repeal the state's novel high-earners income tax policy. The authors preserved the parts of the policy they like and jettisoned what they didn't. Its passage would make it harder for Gov. Bob Ferguson and state lawmakers to effectively govern the state. Voters should say no. The governor and Legislature are charged with crafting a sensible budget to fund state services, including its K-12 school system, highway network and much more. Since 2023, they've failed to carry out this critical role effectively. Under Democratic leadership, budget writers perennially have outspent tax revenues, relying on budget gimmicks and transfers to plug gaps, like filling potholes on a highway to fiscal hell. Their mismanagement has reached the level that leading bond ratings agencies recently gave the state a negative outlook, in large part for drawing down state reserves to the nation's worst level. If they don't change their ways, Washington's sterling credit rating could be downgraded. That could mean more taxpayer money is diverted to paying off debt than to providing services. These feckless budget practices must stop. But Initiative 645 does more than take away the 9.9% tax on incomes over $1 million. It maintains a bevy of promised tax credits that, without the income tax to fund them, would dig an even deeper budget hole. And it would prevent legislators from altering any of the initiative's impacts for two years, absent a supermajority vote. That would come at an economically uncertain time: the last two years of the Trump administration, whose budget cuts have required Olympia to backfill lifesaving social programs; and with the state's unemployment rate surging to the highest in the nation. Advertising Yes, there are downsides to an income tax. Some Washingtonians pack up and move to avoid paying it. Cornell University Professor Cristobal Young, who studies tax-driven mobility, estimates 1.9% of the state's 25,000 highest wage earners would depart Washington. And the state's economy has enjoyed a competitive advantage by not having one. It remains to be seen whether the tax will be a competitive disadvantage. Forty-one other states levy an income tax, including broader levies that go beyond the wealthy. What many entrepreneurs and business leaders decry, including former Starbucks CEO Howard Schultz and Microsoft President Brad Smith, is the state's skewed tax code, with nation-leading rates across different tax categories. With the country's third highest gas tax, second highest sales tax, and one of the few states with a business tax on gross receipts, Washington state is already a tax outlier that is harmful to new companies expanding here and growing existing ones. Lawmakers should be focused on pulling back the levers that make the state's tax environment unusual on a national stage. Businesses need a tax code that is balanced, predictable and fair. What legislators would reach for if voters approve 645's elimination of the income tax would likely exacerbate that tax peculiarity. Wide Democratic majorities may make some budget cuts but they will not produce the austerity budget Initiative 645's supporters want. They are likely to instead consider raising existing regressive taxes or new ones, like a Seattle-style payroll tax. Those would be worse for the state's economy. Several lawmakers, including Rep. Amy Walen, D-Kirkland, and Rep. Kristine Reeves, D-Federal Way, introduced amendments earlier this year that would have injected transparency and fairness into the bill. For instance, Walen called for a modest cut to the state's sales tax that would've eased the cost crunch on every Washingtonian. Disappointingly, it failed in the House, by a vote of 43-54. Lawmakers should keep trying to improve the policy. While previous income tax proposals have failed in the state, a November 2025 poll conducted by DHM Research found 61% of respondents, including 54% of Republicans, are supportive of such a tax on millionaires. With President Donald Trump in the White House and a Republican Congress gutting the federal social safety net, a majority of Washingtonians appear to believe the state should step in and meet that obligation. Yes, lawmakers did not do enough this past session to provide meaningful tax relief to those who need it most. But a flawed initiative stapled over faulty policy does not fix the state's budget problems. Don't toss the tax. Vote no.