Washington approves new tax for millionaires – and billionaires are already packing their bags

After 25 grueling hours of debate on the House floor, including a nearly paralyzing attempt at a filibuster with more than 81 amendments presented by Republicans to prevent the proposal from moving forward, the state of Washington made history this week by approving a bill that creates a tax on millionaires — the first income tax in the state’s history.

On March 9, lawmakers approved a 9.9% tax rate on personal income above $1 million a year, a first for a state that previously had no income tax. The final vote was 52 to 46, and the floor debate became the longest in Washington history, easily surpassing the previous record of nine hours.

“We knew it was going to be a pretty big effort,” state Rep. Brianna Thomas, a Democrat who supported the measure, told . “We have 93 years of precedent before us, behind us and around us whenever we discuss income tax.”

Washington was one of nine U.S. states without an income tax and had operated with essentially the same tax structure — based on sales and corporate taxes — since its economy was dominated by agriculture, lumber and shipping in the early 20th century.

The last vote on income tax in the state took place in 1932, when the proposal was approved with a large majority. A year later, however, the state Supreme Court overturned it on the grounds that income is classified as property under the state Constitution, which requires uniform taxation. In 2010, lawmakers tried again to introduce an income tax, but the proposal didn’t even come close to passing.

For Thomas, the economy has simply outgrown the current tax system. Washington is now home to trillion-dollar global giants like Amazon, Microsoft and Boeing, while facing a projected budget deficit of between $10 billion and $12 billion over the next four years.

“Washington state was originally built on an agricultural and timber economy,” she said. “We still have a tax code based on apples and cherries while producing some of the world’s leading technologies.”

The result is a tax structure that economists consistently classify as among the most regressive in the United States. According to the Institute on Taxation and Economic Policy, the richest 1% in Washington pay just 4.1% of their income in state and local taxes, while the poorest 20% pay 13.8%.

“We have more millionaires and billionaires than ever before, and they pay, in practice, a tax rate of around 4%,” said Thomas. “Meanwhile, workers pay 11% of their income and people with lower income pay 14%. Isn’t it unfair that those who have more pay less and those who have less pay more proportionally?”

The bill establishes a tax rate of 9.9% on personal income above $1 million per year, affecting approximately 21,000 taxpayers, or less than 1% of Washington’s population. The measure is expected to generate between US$3.5 billion and US$4 billion per year when it comes into force in 2029.

The text also includes tax relief for other taxpayers, with sales tax exemptions for diapers, over-the-counter medicines and personal hygiene products, in addition to the expansion of the Working Families Tax Credit.

The approval, however, was not smooth. The House considered 81 amendments over 25 hours, as Democrats worked to secure support within their own party.

“There was no unified consensus among Democrats,” Thomas told Fortune.

The state Senate later approved the measure by a vote of 27 to 21. Speaking to Fortune before the vote, Thomas even joked that the 25-hour debate would likely avoid a repeat in the Senate: “The Senate will agree, because nobody wants to fight a 25-hour battle on the floor. That’s not how the Senate works.”

The project now goes to Governor Bob Ferguson, who has already signaled that he intends to sign it into law.

Still, Thomas considers that the victory may not be definitive.

“We need to let the process continue,” he said. “We will still have a new review in the state Supreme Court and there will also need to be a popular vote. There is still a long way to go before this actually becomes the law.”

Other states already propose tax for billionaires

The measure approved in Washington is the most concrete step yet in a broader movement in the United States to tax large fortunes.

Recently, Senator Bernie Sanders and Representative Ro Khanna presented the “Make Billionaires Pay Their Fair Share Act”, a proposal for a 5% annual tax on the wealth of approximately 938 Americans worth more than US$1 billion. According to Sanders, this group has $8.2 trillion in wealth.

In the first year, the proceeds would fund a one-time $3,000 check for families with annual incomes of up to $150,000. After that, the funds would go toward Medicaid, teacher salaries and child care costs. Sanders estimates the project could generate $4.4 trillion over ten years.

In California, a union introduced the Billionaire Tax Act of 2026, a referendum initiative that provides a flat 5% tax on residents worth more than $1 billion. If approved, the tax could generate around US$100 billion in revenue, earmarked for health and food assistance.

“Those who have more have more than ever before,” Thomas said. “The have-nots have less than ever before. This is simply not sustainable for everyday people.”

Billionaires begin to leave the state

Almost immediately after the project’s approval, billionaire Howard Schultz, founder of Starbucks, announced that he is leaving Seattle for Miami, where he recently paid $44 million for a penthouse.

While he did not confirm that the change was due to the tax, Schultz — whose fortune is estimated at $6.6 billion — wrote on LinkedIn that he hopes Washington “remains a place where business and entrepreneurship thrive.”

He’s also not the first to leave the state. Amazon founder Jeff Bezos moved to Miami in 2023, costing the state an estimated $954 million in tax revenue in 2024 alone.

When Bezos sold 50 million Amazon shares that year from Florida, he saved about $610 million in state taxes since he was no longer a Washington resident.

Despite Schultz’s departure, Thomas showed no concern.

“I sincerely hope that Washington is more than a spreadsheet or an account for someone,” he said. “To me, this isn’t a math problem. It’s a public policy problem tied to whether I care about my community.”