Here is what proponents of an income tax say: Washington’s tax system is regressive, government’s share of personal income has declined, and an income tax is therefore necessary to fund public services. [1]
Those conclusions do not follow. Regressivity concerns who pays. A spending-to-income ratio measures government relative to the economy. Neither, by itself, establishes how much government should spend—or justifies adding another major tax.
A fairer tax system is a legitimate goal. A larger tax burden is a separate choice. Washington should not confuse the two.
I oppose Washington’s new income tax because it adds a major tax without replacing the existing system, does not resolve the problem of spending discipline, and risks making Washington a less attractive place to build the next business.
Voters decide on November 3. Initiative Measure No. IP26-645 would repeal the tax and bar future taxes on individual income. I support a yes vote on I-645. My I-645 tracker has the details. [12]
Government is not entitled to a fixed share of our income
A smaller share of a growing economy is not necessarily a smaller government.
Look at the Office of Financial Management’s own published state-and-local expenditure data:
| Fiscal year | Spending per $1,000 of personal income | Inflation-adjusted spending per resident |
|---|---|---|
| 2005 | $189.98 | $10,651 |
| 2013 | $179.99 | $11,010 |
| 2023 | $170.25 | $13,805 |
Source: OFM. These are annual state-and-local figures, not the state operating budget alone. Per-resident amounts come from OFM’s inflation-adjusted series. [2]
Between 2005 and 2023, spending fell as a share of personal income. Yet inflation-adjusted spending per resident rose about 30%. Even using 2013 as the starting point, it rose about 25%. Those percentage changes are calculated from OFM’s published figures. [2]
That does not prove every program is adequately funded. Population and inflation also do not capture every change in healthcare costs, service needs, or public-sector wages. Those are reasons to examine actual costs—not to assume government should always collect the same share of a growing economy.
A falling ratio is not a needs assessment.
Another tax will not fix a spending problem
The 2025–27 near-general-fund operating budget, as passed by the Legislature in the 2026 supplemental, is approximately $80.2 billion. That is a two-year total, not the supplemental increase. [3]
For comparison, the enacted 2015–17 operating budget was $38.5 billion. [13]
In May, former Governor Chris Gregoire told the Association of Washington Business’s Spring Summit:
“…we don’t really have an income problem, we have a spending problem.” [4]
In July, former Governor Gary Locke told KOMO News:
“Olympia simply needs budget discipline.” [5]
Locke criticized using temporary funding, including COVID money, to create permanent obligations. He did not endorse repeal of the income tax in that interview. His warning was about making commitments without a sustainable way to pay for them. [5]
That is the problem another revenue source cannot, by itself, solve. New revenue can support essential services. It can also become the starting point for another round of commitments that leaves lawmakers demanding still more money.
Before asking taxpayers for more, Olympia should show what maintaining essential services actually costs, distinguish those costs from new programs, and identify what spending will stop when it is not producing results.
Regressivity does not require a bigger tax burden
The burden on lower-income households is a real concern. ITEP’s analysis of Washington’s 2024 tax law documented a system in which lower-income households paid a substantially larger share of income in state and local taxes than higher-income households. [6]
But that is an argument for reducing the burden on those households. It is not proof that government needs a larger total budget.
The income-tax legislation includes real relief: an expanded Working Families Tax Credit, selected sales-tax exemptions, and small-business B&O relief. It would be wrong to deny that. But it retains the sales-tax and B&O systems while adding an income tax with its own calculations, credits, and filing obligations. [7]
A more progressive distribution of taxes can be achieved by collecting less from people with lower incomes, not only by collecting more from people with higher incomes. Financing relief through spending restraint requires difficult choices. So does financing it through a new tax. The latter should not be treated as the only legitimate option.
Washington needs to attract the next company
I worry less about companies leaving than about companies never starting here. An existing company can keep growing in Washington while the state becomes a less attractive place to start the next one.
The losses I am concerned about are quiet ones. The founder who starts elsewhere. The expansion that goes to another state. The company that never forms here. None of them makes a headline.
Public services matter to those decisions, too. Schools, infrastructure, and public safety are reasons to invest effectively—not reasons to assume every additional tax will make the state more competitive.
The relevant question is whether the benefits of additional spending justify the additional costs and risks. A revenue estimate alone cannot answer it.
“Only millionaires” leaves out important choices
The law schedules a 9.9% tax on Washington taxable income beginning in 2028, after a starting $1 million standard deduction. The first returns are due in 2029. [9] [10]
The deduction is shared by spouses and registered domestic partners, even on separate returns. Consider two full-year Washington residents who are neither married nor registered domestic partners, each earning $700,000 in taxable wages in 2028. Assuming no other income, deductions, or credits, neither owes this tax. Married, the same two people would owe $39,600: 9.9% of the $400,000 above their shared deduction. [10]
That is a marriage penalty, not a difference in what the two people earn.
An S corporation shareholder can also have taxable income from profits left in the business rather than distributed. Because the state tax starts with federal adjusted gross income, that income can count toward the new tax. Available credits, including the nonrefundable credit for B&O or public utility tax paid on the same income, which passes through to shareholders pro rata, matter to the final bill; retaining the profits is not, by itself, an exemption. [7] [10] [11]
The distinction is important: annual taxable income is not the same thing as cash available for personal spending. The tax’s effects depend on household status and how income is earned—not just the reassuring label attached to it.
The $1 million deduction is not a permanent limit
The statute provides a $1 million deduction, inflation adjustments, and a separate condition: the exception to Washington’s general income-tax prohibition applies only “so long as the standard deduction is at least $1,000,000 for a household.” [10]
Those are statutory protections. A future Legislature could amend both the deduction and the prohibition’s exception. That would require new legislation; a reduction is not automatic or scheduled under this law. [10] Gov. Ferguson has publicly pledged to “veto any legislative action that lowered the threshold below the million dollars.” That pledge binds only him, and only while he is governor. A future governor could sign such a bill, and the Legislature can override a veto by a two-thirds vote of the members present in each house (Wash. Const. art. III, § 12).
The point is not that expansion is inevitable. It is that today’s threshold is not a constitutional guarantee. Voters should evaluate the new tax system being established, not assume its first threshold can never change.
Better government, not just more revenue
Washington needs a tax system that is fairer, simpler, and compatible with building businesses and creating jobs. It also needs a budget that ranks priorities and funds permanent commitments sustainably.
Government is not entitled to a fixed percentage of our income. More money is not a substitute for better government.
Sources
5. Chris Daniels, KOMO News, interview with former Governor Gary Locke, July 20, 2026.
11. Internal Revenue Service, Publication 525 (2025), Taxable and Nontaxable Income, S Corporations.
Calculation note: Percentage changes use OFM’s inflation-adjusted per-capita series: $13,805 ÷ $10,651 − 1 = 29.6%; $13,805 ÷ $11,010 − 1 = 25.4%. These are annual state-and-local spending comparisons. The reported series and its percentage changes are used without alteration.
