• The Washington Supreme Court upheld the 2021 capital gains excise in Quinn v. State of Washington (2023), characterizing it as an excise on the sale or exchange of capital assets and formally preserving Culliton v. Chase (1933).
• ESSB 6346 was enacted in 2026 and imposes a 9.90% tax on Washington taxable income above a $1 million standard deduction, beginning January 1, 2028, with first returns due in 2029.
• The Washington Supreme Court’s May 2026 order in Heywood v. Hobbs held the statute exempt from referendum as a measure necessary for the support of state government under § 1208 of the bill. Heywood did not decide the constitutionality of the tax.
• The constitutional challenge to ESSB 6346 was filed April 9, 2026 in Klickitat County by the Citizen Action Defense Fund, led by former Attorney General Rob McKenna and former Supreme Court Justice Phil Talmadge. That case remains pending.
What follows is commentary on the political and legislative context of those enacted facts.
In April 2018 — eight years before Governor Ferguson signed ESSB 6346 — state Senator Jamie Pedersen wrote an email explaining his tax strategy. The email is a public record. It describes the capital gains tax as the "most likely path" to a broader goal. The next day, in a follow-up email, he spelled out that goal: a progressive income tax enacted by simple majority vote.
The vehicle for getting there was litigation. Pass a capital gains tax. Get it challenged. Use the court fight to weaken or overturn the 1933 precedent — Culliton v. Chase — that treats income as property in Washington, and that has blocked a graduated income tax for 93 years.
That is not my interpretation. That is what the emails, as reported, describe.
It worked — so far
The capital gains tax passed in 2021. It was challenged. The Washington Supreme Court upheld it in 2023. The Culliton precedent wasn't overturned, but it bent — the Court preserved it in name while distinguishing capital gains as excise taxation. Then came ESSB 6346 — Washington's new 9.9% tax on taxable income above $1 million per household.
The new tax takes effect January 1, 2028; first returns and payments are due in 2029.
Public records emails obtained in 2026 and reported by The Center Square and Washington Policy Center show Pedersen still focused on the same legal objective during drafting. In one email, read aloud to him on camera in May 2026 and not disputed, he wrote that he would "like to force the Washington State Supreme Court to reconsider its case law that considers income to be property." In a December 6 email he asked colleagues for input on "what will give us the best shot to have Culliton overruled."
In a December 23, 2025 KUOW interview, asked about the 2024 statute prohibiting a new state income tax, Pedersen said: "That was — what did Mary Poppins call that? — a pie crust promise. Easily made, easily broken. We put that language into statute, and we can amend it any time we want to. I wouldn't take that super-seriously."
Asked on camera by FOX 13 Seattle in May 2026 why he didn't pursue a constitutional amendment instead of working with the Attorney General's office to engineer a court challenge, Pedersen compared his strategy to Republican legislators' decades-long effort to overturn Roe v. Wade, calling it "absolutely a normal part of the legislative process and of the balance of powers."
Asked about former Attorney General Rob McKenna's view that "it is not the attorney general's role to explain to legislators how to violate the Constitution," Pedersen said the 1933 Culliton decision "is wrongly decided" and that "it is absolutely the regular role of the legislative branch not just to roll over when there's a bad decision but to push back."
Asked about former Justice Phil Talmadge's view that the coordination with the AG's office was inappropriate, Pedersen said: "It is absolutely normal for us to seek the advice of lawyers as we draft bills."
What Pedersen did not address is that the Legislature is not without legal resources of its own. The Washington State Legislature employs dedicated legal staff — including the Office of the Code Reviser and attorneys in the House and Senate Offices of Program Research — whose job is precisely to advise on the constitutionality and drafting of legislation.
Asked directly whether ESSB 6346 violates the constitution, his answer was: "No no no no no no no no no — there is nothing in the constitution about income taxes." The 1933 Culliton decision held that income is property, and the Washington Constitution caps property taxes at 1% and requires uniform application within a class. That is the precedent ESSB 6346's authors are trying to move.
What this means for your planning
I am not telling you what to think about the politics. That is not my job.
My job is to tell you what the documents mean for your situation.
They mean the $1 million threshold is a starting point, not a finish line. The litigation now working through the courts — the McKenna/CADF challenge filed April 9, 2026 in Klickitat County Superior Court — is fighting to hold the line on 93 years of precedent. (For the doctrinal analysis of that challenge under Quinn and Culliton, see our constitutional analysis post.) That challenge argues ESSB 6346 is unconstitutional because, under Culliton, income is property — and Washington's Constitution caps property taxes at 1% and requires uniform application within a class, neither of which the new 9.9% graduated tax satisfies. Maybe it wins. Keep in mind that the Washington Supreme Court's May 5, 2026 order addressed only whether opponents could force a referendum — it did not rule on the constitutionality of the tax itself. That question remains open.
The people who wrote ESSB 6346 appear to have viewed a constitutional challenge as part of the strategy — and the legislative intent behind that effort is unusually explicit on the public record.
If they are right, a graduated income tax in Washington becomes legally possible with a simple legislative majority. Today it is $1 million. What it is in 2030 or 2035 is a different question.
Plan accordingly.
Washington Tax Planning Guide
If you're a founder, investor, or high earner in Washington, the planning window is open — but it won't stay open. This guide covers your options under ESSB 6346 before the tax takes effect in 2028.
Get the Guide →Disclosure: The outcome of this litigation intersects with judicial elections in Washington. If you've found this analysis useful, consider supporting Full Court Press and the judicial races.
