SB 5797 and HB 1319 (2025–26 session) didn't pass . They didn't even get a floor vote. And because of that, most people in Washington's startup and investor community have mentally filed them under "not happening."
That's the wrong read.
What the bills actually propose
Both bills would impose an annual tax on the value of intangible financial assets — stocks, bonds, ETFs, mutual funds — held above a threshold. SB 5797 targets holdings above $50M. HB 1319 sets the threshold at $100M. Both are modeled in the 1–2% annual range on assets above the threshold.
This isn't a tax on what you earn in a year. It's a tax on what you own — every year — regardless of whether you sold anything, received any income, or had any liquidity event. If your private company stock is worth $60M and you haven't sold a share, you'd owe roughly $600K per year in tax under SB 5797 — cash or no cash.
That's the definition of a wealth tax. And it's been sitting in the Washington legislature in bill form for two sessions now.
Why people aren't taking it seriously — and why they're wrong
The argument goes: France tried this. Sweden tried this. Most places that tried broad wealth taxes walked them back. The Department of Revenue's own analysis on HB 1319 projects only ~3,400 affected residents — a population mobile enough to leave. The policy doesn't work, so it won't pass.
That reasoning confuses "bad policy" with "dead policy."
ESSB 6346 was also described as unlikely until it wasn't. Washington had "no income tax" until 2025. The capital gains tax survived its constitutional challenge. Each of these passed because the political logic held even when the economic logic didn't — and because each one made the next step easier to justify. ESSB 6346's progression through committee follows the same pattern these wealth tax bills are tracing now.
The wealth tax bills are doing exactly that work right now, in committee, session after session. They're normalizing the frame and establishing the precedent that financial assets are fair game for taxation. The argument "we already tax some of this" becomes the floor, not the ceiling.
The illusion of safety
Here's the trap: most people below the $50M threshold think this doesn't affect them. They're thinking about the wrong thing.
The relevant question isn't where the threshold is today. It's where it goes when the revenue projections come in short — which they will, because people move. The $50M threshold exists to pass the bill. It doesn't exist because the legislature thinks $49M of stock holdings is an unreasonable amount to own.
If you've built something valuable in Washington, the path of this legislation matters to you even if you're not in scope today.
What this means practically
The planning window for ESSB 6346 runs through 2027. If wealth tax legislation advances, it compresses that window further — and adds a different set of decisions on top of the income tax ones.
- Domicile change is a one-time decision with a long tail. The time to model it is before the political environment removes the optionality, not after.
- QSBS structure matters more, not less, in a world where the legislature is actively looking for new bases to tax. Gains excluded from federal AGI under Section 1202 are harder to reach.
- Entity structure and exit timing both carry more weight when annual asset values could become taxable, not just realization events.
None of these are emergency moves. They're planning moves — and planning moves only work when you make them early.
If you're building toward a $10M–$100M outcome in Washington, this is already your problem.
If you're a founder, investor, or high earner in Washington and you haven't modeled your exposure under the current law — let alone what comes next — book a call. And for the full mechanics of ESSB 6346, see Washington's New Income Tax: The Complete Guide for High Earners.
