Washington state Democrats look at imposing income tax on higher earners

Washington state Democrats are considering a 9. 9% income tax on adjusted gross income exceeding $1 million as a solution to ongoing budget shortfalls. This tax could generate approximately $3 billion from around 20,000 households, according to sources familiar with the discussions. Senate Majority Leader Jamie Pedersen noted that no formal legislation has been solidified yet, emphasizing the need for further evaluation of various revenue options. The proposal arises as tax collections fall short of expectations, with a billion-dollar gap looming in the current two-year budget.

Governor Bob Ferguson has expressed skepticism about additional revenue measures, citing significant revenue raised earlier this year. The state has previously rejected similar income tax proposals due to legal challenges from the Washington Supreme Court. Many progressives advocate for an income tax as a means to address the state's regressive tax system. Pedersen aims to create a fairer tax burden distribution across incomes, highlighting the urgency of the situation.