Millionaire tax no more? Rightwing groups lead effort to repeal Washington state law
Source: Guardian Econ ↗
Voters in Washington will decide in November whether to repeal the state’s newly enacted “millionaire tax,” a 9.9% levy on income above $1 million that was signed into law in March. The repeal effort is being driven by a coalition of right‑leaning advocacy groups, most prominently Let’s Go Washington, a political action committee founded by conservative hedge‑fund executive Brian Heywood, who also finances the ballot initiative known as Initiative 645. Proponents of the tax argue that it would target roughly 20,000 of the state’s highest‑earning households and generate about $3.5 billion a year for core services such as education, health care, expanded tax credits and sales‑tax exemptions. Opponents, including many of the state’s billionaires and the initiative’s backers, claim the tax could trigger a “slippery slope” that eventually expands to lower‑income earners and could prompt a flight of wealth and talent from Washington’s “golden goose” economy anchored by Microsoft, Amazon, Boeing and other tech giants.
The tax emerges against a backdrop of Washington’s historically regressive fiscal structure, which relies heavily on sales, property and other consumption taxes. Studies by the non‑partisan Washington State Budget and Policy Center show that the lowest‑income quintile currently pays 13.8% of its earnings in state taxes, while the top 1% pays only about 4%, underscoring the disparity the new levy seeks to address. The measure follows a series of progressive revenue experiments, including a 7% capital‑gains tax approved in 2021 that survived legal challenges, and reflects a broader national trend where states such as Massachusetts, Maine, New York and Hawaii have adopted similar taxes on high earners. Legislative leaders, including Senate majority leader Jamie Pedersen—one of the tax’s architects—note that Washington’s Supreme Court once ruled income taxes unconstitutional, a barrier only recently overcome through voter‑approved reforms.
If the initiative succeeds, the anticipated loss of $3.5 billion in annual revenue could force the state to revisit its budget priorities, potentially jeopardizing funding for education, health services and tax‑credit programs. The repeal could also embolden other conservative groups to challenge recent progressive taxes, as seen in the 2024 defeat of a ballot effort targeting the capital‑gains levy. Conversely, a vote to retain the millionaire tax would signal voter willingness to embrace higher taxes on the affluent, despite concerns about capital flight; academic estimates suggest only about 2% of those affected might relocate. The outcome will shape Washington’s fiscal trajectory amid a projected $15 billion shortfall over the next four years and will influence how other states view the political viability of taxing high‑income earners.
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The U.S.'s central bank rate currently stands at 3.75%, so a global rates move like this could feed through to local borrowing costs. The U.S.'s economy is growing at 2.3% with inflation at 3.2%, the backdrop this story's effects play out against locally. Housing-market effects like this are usually felt most where mortgage rates track the U.S.'s own central bank rate closely. With the U.S.'s unemployment at 4.4%, personal-finance effects like this land on a labour market that is currently fairly stable. Health-system effects are harder to localise from economic indicators alone — the real impact in the U.S. depends more on local healthcare capacity than the figures above.
The UK's central bank rate currently stands at 3.75%, so a global rates move like this could feed through to local borrowing costs. The UK's economy is growing at 0.8% with inflation at 3.2%, the backdrop this story's effects play out against locally. Housing-market effects like this are usually felt most where mortgage rates track the UK's own central bank rate closely. With the UK's unemployment at 5.6%, personal-finance effects like this land on a labour market that is currently fairly stable. Health-system effects are harder to localise from economic indicators alone — the real impact in the UK depends more on local healthcare capacity than the figures above.
France's central bank rate currently stands at 2%, so a global rates move like this could feed through to local borrowing costs. France's economy is growing at 0.9% with inflation at 1.8%, the backdrop this story's effects play out against locally. Housing-market effects like this are usually felt most where mortgage rates track France's own central bank rate closely. With France's unemployment at 7.9%, personal-finance effects like this land on a labour market that is already under strain. Health-system effects are harder to localise from economic indicators alone — the real impact in France depends more on local healthcare capacity than the figures above.
Romania's central bank rate currently stands at 6.5%, so a global rates move like this could feed through to local borrowing costs. Romania's economy is growing at 0.7% with inflation at 7.8%, the backdrop this story's effects play out against locally. Housing-market effects like this are usually felt most where mortgage rates track Romania's own central bank rate closely. With Romania's unemployment at 6%, personal-finance effects like this land on a labour market that is currently fairly stable. Health-system effects are harder to localise from economic indicators alone — the real impact in Romania depends more on local healthcare capacity than the figures above.
The UAE's central bank rate currently stands at 3.65%, so a global rates move like this could feed through to local borrowing costs. The UAE's economy is growing at 3.1% with inflation at 2.5%, the backdrop this story's effects play out against locally. Housing-market effects like this are usually felt most where mortgage rates track the UAE's own central bank rate closely. Health-system effects are harder to localise from economic indicators alone — the real impact in the UAE depends more on local healthcare capacity than the figures above.