Millionaire Tax Faces Washington State Repeal Vote as Conservative Campaign Intensifies

Key Points

• Washington voters are due to decide in November whether to repeal the state’s new 9.9% income tax on earnings above $1 million.
• The tax was signed into law by Governor Bob Ferguson in March and is designed to apply to about 20,000 of the state’s highest-earning households.
• Supporters say the measure could generate about $3.5 billion a year for education, healthcare, tax credits and sales-tax exemptions.
• Conservative campaigner Brian Heywood and his political action committee, Let’s Go Washington, have helped lead the repeal effort through Initiative 645.
• Heywood argues that the tax could encourage wealthy residents and businesses to leave Washington and weaken an economy built around major companies including Microsoft, Amazon and Boeing.
• Supporters of the tax argue Washington’s reliance on sales and property taxes places a disproportionately heavy burden on lower-income households.
• Washington has historically lacked a broad state income tax, although voters and lawmakers have recently approved progressive revenue measures including a capital-gains tax.
• Recent polling cited in the report indicates that 57% of respondents oppose repealing the millionaire tax.
• A separate legal challenge to the tax is expected to reach the Washington Supreme Court early next year.
• Labour unions and other organisations defending the tax have reportedly spent substantially more than its repeal campaign, with union contributions exceeding $6 million.

The central issue in the Washington tax battle is whether voters will allow the state to retain a new 9.9% income tax on earnings above $1 million or overturn it through a conservative-backed ballot initiative. The result could influence how Washington raises revenue, how its tax burden is distributed between income groups and whether lawmakers pursue further changes to the state’s historically unusual tax system.

Evening Washington News (EW) October 7, 2026 – Washington voters are preparing to decide whether to repeal the state’s new millionaire tax, placing one of the country’s most closely watched state-level tax experiments before the electorate. The measure applies a 9.9% tax to income above $1 million and was signed into law by Governor Bob Ferguson in March. Supporters say it could provide about $3.5 billion in annual revenue for public priorities including education and healthcare, while opponents argue that taxing high earners risks encouraging wealthy residents and businesses to relocate.

The November ballot initiative, identified as Initiative 645, has become the latest chapter in Washington’s long-running dispute over whether the state should rely more heavily on income-based taxation.

The campaign has also developed into a broader argument about Washington’s economic model. Conservative opponents describe the tax as a possible first step towards extending income taxation to households earning substantially less than $1 million. Supporters counter that the measure is narrowly targeted and represents an effort to address what they describe as an unusually regressive tax system.

Why is Washington’s millionaire tax facing a repeal campaign?

The immediate dispute centres on Initiative 645, which seeks to overturn the income tax imposed on earnings above $1 million.

The measure is being supported by conservative organisations, including Let’s Go Washington, the political action committee founded by hedge-fund executive Brian Heywood. According to the material provided for the report, Heywood has played a leading role in financing and promoting the repeal effort.

The campaign argues that the tax could create a broader precedent for income taxation in Washington. Opponents have presented what they describe as a “slippery slope”, warning that the definition of taxpayers affected by income taxation could eventually expand beyond million-dollar earners.

Governor Ferguson has sought to address that concern by stating that he would veto an attempt to extend the millionaire tax to lower-earning households.

The governor’s position is significant because the debate has become partly focused on what could happen after the November vote rather than only on the current tax rate.

Supporters of the repeal argue that preserving Washington’s traditional tax structure is important to maintaining its economic competitiveness. Tax supporters argue that the existing structure already places a comparatively heavy burden on people with lower incomes.

How much money could the millionaire tax raise?

The coalition supporting the tax repeal defeat says the measure could raise approximately $3.5 billion annually.

That money is expected to provide additional resources for areas including education and healthcare. Supporters also point to potential expansion of tax credits and sales-tax exemptions.

The debate comes as Washington has faced pressure over its public finances and changing federal funding conditions. Democratic lawmakers were confronting an estimated shortfall approaching $15 billion over four years in 2025, according to the supplied report, increasing pressure to identify new sources of state revenue.

Jamie Pedersen, the Washington state Senate majority leader and one of the architects of the millionaire tax, has argued that rejecting the tax could leave lawmakers with difficult alternatives.

Pedersen said lawmakers might instead have to consider measures such as increasing the sales tax or introducing a statewide payroll tax.

If the millionaire tax survives, he indicated that lawmakers could also consider wider reforms to other parts of the state’s tax system, including business taxes.

Why do supporters say Washington needs a different tax structure?

Washington has historically relied on sales taxes, property taxes and fees rather than a broad personal income tax.

Critics of that system argue that consumption-based taxes place a larger proportion of the burden on people with lower incomes.

Emily Vyhnanek of the Washington State Budget and Policy Center described Washington as having “the second-worst tax code in the nation when it comes to who actually pays as a share of their income”, according to the supplied report.

She said people in the lowest-earning fifth of households can spend as much as 13.8% of their annual income on state taxes, compared with about 4% among the top 1%.

The figures have become central to the argument made by millionaire-tax supporters. Their position is that Washington’s tax system should take greater account of ability to pay.

The issue is particularly prominent because the state has accumulated considerable wealth through its technology and corporate sectors.

Washington is home to major companies including Microsoft, Amazon and Boeing, while its economy has also produced some of the world’s wealthiest individuals.

Supporters of the tax therefore argue that the state has an unusually large concentration of high-value economic activity that can provide an additional source of public revenue.

How did Washington reach this point after decades without an income tax?

The dispute over income taxation in Washington stretches back almost a century.

Pedersen has traced the roots of the current debate to the 1930s. The Washington Supreme Court previously ruled that an income tax constituted a property tax, creating a significant constitutional obstacle to introducing a conventional graduated income tax.

That legal history contributed to Washington’s reliance on sales taxes, property taxes and other charges.

In 2002, a state commission led by Bill Gates Sr concluded that Washington’s tax code was unusually regressive and recommended introducing a state income tax.

Voters subsequently rejected an income-tax proposal in 2010 by a substantial margin. The proposal would have imposed a tax on people earning more than $200,000.

The campaign against that measure included significant contributions from wealthy technology figures. Steve Ballmer, then Microsoft’s chief executive, was identified as the leading contributor, while Amazon founder Jeff Bezos ranked fourth among contributors opposing the measure.

The historical record illustrates the unusual political position of Washington’s wealthy residents. Some have opposed income taxation while others have subsequently supported progressive tax measures.

What changed after Washington introduced its capital-gains tax?

A significant change occurred in 2021 when Washington lawmakers approved a 7% tax on capital gains above $250,000.

The measure survived a constitutional challenge and later faced an effort to repeal it through a 2024 ballot initiative.

That repeal effort was decisively rejected by voters.

Pedersen described the result as an indication that voters could support a tax that opponents characterised as an income tax.

The capital-gains tax consequently became an important precedent for supporters of the millionaire tax.

It demonstrated, in their view, that Washington voters could approve new taxes on high-value income or wealth-related gains even after decades of rejecting broader income-tax proposals.

The millionaire tax represents a further step in that evolution, although its legality remains subject to a separate court challenge.

Who is leading the campaign to repeal the millionaire tax?

Brian Heywood, a conservative hedge-fund executive, has emerged as one of the most prominent figures behind the repeal effort.

Heywood founded Let’s Go Washington in 2022 and has reportedly spent at least $11 million of his own money on 20 proposals.

One of those campaigns sought to repeal Washington’s carbon market. More than 60% of voters rejected that effort in 2024.

The supplied report says that campaign opposing Heywood’s carbon-market proposal was partly funded by Bill Gates and Steve Ballmer.

Heywood moved his business from California to Washington in 2010, with the state’s absence of capital-gains and income taxes among the factors that attracted him.

He has argued that the millionaire tax could undermine Washington’s economic advantages.

Heywood said he knew numerous wealthy individuals who had left Washington, including his business partner, who moved to Arizona.

However, academic research cited in the report suggests that approximately 2% of residents affected by the millionaire tax might leave the state.

That figure provides an important distinction between anecdotal claims about wealthy residents relocating and estimates produced through academic research.

Why are some businesses and donors becoming part of the political dispute?

The political battle has extended beyond traditional campaign advertising and ballot arguments.

In September, public disclosure records revealed donations from several Washington business owners to Let’s Go Washington. Some subsequently faced public criticism and boycotts.

According to the supplied report, the affected business owners said their donations were specifically intended to support the effort against the millionaire tax rather than Let’s Go Washington’s other initiatives.

Let’s Go Washington is also supporting two other proposals on the 2026 ballot.

One of those proposals concerns participation by transgender girls in girls’ school sports. Opponents have criticised that initiative and described its proposed biological-sex verification requirements as extreme.

Heywood has argued that Democratic lawmakers and Washington’s election-finance watchdog have attempted to isolate him politically and damage his reputation among potential donors.

The conflict has therefore developed into a wider political contest involving campaign financing, tax policy and other ballot initiatives.

Has a separate campaign been established to repeal the tax?

Yes. A separate campaign supporting repeal of the millionaire tax was launched in July.

The campaign selected former Republican congresswoman Jaime Herrera Beutler as its spokesperson.

The supplied report says that the campaign did not respond to a request for comment.

The existence of a separate organisation illustrates the effort to present the repeal campaign independently from Let’s Go Washington and Heywood.

Pedersen suggested that supporters of repealing the tax may have recognised the political difficulties associated with Heywood and could be seeking to distance themselves from what he described as his “pretty toxic brand”.

That dispute over campaign identity could become relevant as voters assess competing arguments over the tax.

Why are opponents of the repeal initiative confident about the vote?

Recent polling cited in the report indicates that the repeal campaign faces a difficult electoral environment.

Research firm DHM found that 57% of Washington residents surveyed opposed repealing the millionaire tax.

The polling also indicated a change in attitudes towards the possibility of income taxation below the $1 million threshold.

According to Kara Krnacik, who helped lead the survey, 41% of respondents supported an income tax that could eventually apply to people earning $100,000 or more. That compared with 36% in November 2025.

The findings do not establish what voters will ultimately decide in November, but they suggest that public attitudes towards income taxation may be changing.

The result would represent a significant shift from Washington’s historical resistance to income taxes if voters ultimately maintain the millionaire tax and continue to support other progressive revenue measures.

How much are unions and other supporters spending to defend the tax?

Campaign-finance records cited in the report suggest that opponents of Initiative 645 have spent substantially more than supporters of the repeal.

The difference is reportedly greater than 50%.

Major labour unions in Washington have contributed more than $6 million to the campaign defending the millionaire tax.

The spending gap provides an indication of the organisational resources behind both sides of the campaign.

At the same time, Heywood has said he is considering ways to restrict how unions receive and distribute funds in Washington.

That prospect could extend the dispute beyond the November vote and into a wider debate about campaign finance and the political role of organised labour.

What legal challenges remain over Washington’s millionaire tax?

The November ballot is not the only test facing the tax.

The Washington Supreme Court is scheduled to hear a legal challenge early next year.

That case is expected to examine whether the new income tax complies with Washington’s constitutional and legal framework.

The court challenge is particularly important because the state’s historical legal treatment of income taxes has played a central role in Washington’s tax structure.

Even if voters reject Initiative 645 and retain the tax, the legal proceedings could determine whether the measure remains in force.

Conversely, if voters repeal the tax, the political debate over state revenue would not necessarily end.

Lawmakers would still have to address the underlying budget pressures that contributed to the tax’s introduction.

How does Washington’s vote compare with tax measures in other states?

Washington’s debate forms part of a broader national discussion about how states should tax wealth and high incomes.

Massachusetts, Maine and New York already impose distinctive tax rates affecting millionaires.

Hawaii approved a comparable millionaire tax measure in May as lawmakers sought additional revenue.

California is also preparing for a major ballot debate over a proposed one-time 5% tax on billionaires’ wealth.

California’s proposal differs from Washington’s approach because it would target accumulated wealth rather than income above a specified threshold.

The California proposal has faced opposition from many billionaires as well as Governor Gavin Newsom. Some progressive organisations have also raised questions about the long-term effectiveness of a one-off wealth tax.

The developments show that Washington’s debate is part of a broader question across the United States over whether states should seek additional revenue from their wealthiest residents.

What could happen if Washington voters repeal the millionaire tax?

If voters repeal the tax, lawmakers would have to reconsider how to replace the revenue expected from high earners.

Pedersen has warned that the alternatives could include higher sales taxes or a statewide payroll tax.

Such measures would have different effects across income groups.

A sales-tax increase would affect consumption and could therefore raise questions about the distribution of the tax burden. A payroll tax would create another mechanism for raising revenue through employment-related income.

The political consequences could also be significant because the millionaire-tax debate has already become part of the broader argument over Washington’s tax structure.

A repeal could strengthen opponents who argue that Washington should preserve its traditional tax model.

It could also encourage lawmakers to examine other sources of revenue rather than continuing to expand income taxation.

What could happen if voters keep the millionaire tax?

If voters reject Initiative 645, the tax would remain subject to the pending legal challenge.

Supporters could then argue that voters have provided additional political legitimacy for progressive tax measures.

Pedersen has indicated that lawmakers could consider reforming other regressive taxes, including taxes imposed on businesses.

However, the governor’s position against extending the millionaire tax to lower-income households would remain an important political constraint.

The result could therefore be a period of further debate over how far Washington should move towards a tax system based more heavily on income and wealth.

For businesses and high-income residents, the outcome could also influence future decisions about where to locate investments, operations and residences.

What is the background to Washington’s millionaire tax dispute?

Washington’s tax system developed around the absence of a conventional state income tax, with sales taxes, property taxes and fees providing much of the state’s revenue.

For decades, efforts to introduce income taxation faced political and legal obstacles.

The 2010 defeat of a proposed tax on people earning more than $200,000 reinforced that history.

The approval of the capital-gains tax in 2021 represented a significant departure from the state’s previous pattern, although the measure was structured differently from a broad personal income tax.

Its survival through legal challenges and a 2024 repeal campaign provided supporters of the millionaire tax with evidence that Washington voters might be prepared to approve targeted taxes on high earners.

The millionaire tax was subsequently developed against a backdrop of budget pressure and concern over the distribution of Washington’s tax burden.

Its opponents, meanwhile, argue that the state’s economic success depends partly on maintaining an attractive environment for wealthy residents, entrepreneurs and businesses.

The competing positions have now converged in Initiative 645 and the forthcoming statewide vote.

What could the millionaire tax vote mean for Washington residents and businesses?

The most immediate effect will depend on whether voters retain or repeal the tax.

For high-income households, retaining the measure would preserve the 9.9% tax on earnings above $1 million. For the wider population, the more consequential issue could be how the state uses the revenue and whether lawmakers subsequently make further changes to the tax system.

For public services, retaining the tax would preserve a projected source of substantial annual revenue for education, healthcare and related priorities.

For policymakers, repeal would create pressure to identify replacement revenue if the projected funds are no longer available.

For businesses, the outcome could become part of the wider calculation surrounding Washington’s tax competitiveness, particularly for companies and individuals with substantial income.

The legal challenge before the state Supreme Court means that uncertainty could continue even after the November ballot.

Prediction: How could the vote affect Washington taxpayers, businesses and high-income households?

The most immediate consequence for Washington taxpayers, businesses and high-income households will be the direction of the state’s future tax policy.

If voters retain the millionaire tax, Washington is likely to continue examining ways of shifting a greater share of its revenue burden towards higher earners while maintaining protections against extending the tax to lower-income households. The pending Supreme Court case could nevertheless determine whether the measure survives its legal challenge.

If voters repeal the tax, lawmakers will face pressure to identify alternative revenue sources. Based on the positions described by state Senate Majority Leader Jamie Pedersen, those alternatives could include changes to sales taxation or the introduction of a statewide payroll tax.

The result could therefore affect more than the approximately 20,000 households directly targeted by the millionaire tax. It could influence the structure of Washington’s broader tax system, future business taxation and the political debate over whether the state should continue moving away from its historic reliance on sales taxes, property taxes and fees.