Washington Unions Pour $7.8 Million Into Fight Over Millionaires Tax

Washington’s new tax on high earners is already shaping into a costly November ballot fight. As of Sept. 20, public-sector unions and their allies had raised $7.8 million to defeat Initiative 645, which would repeal the state’s new 9.9% tax on annual household earnings above $1 million, according to reporting by The Lewiston Tribune.

For affluent Washington households, the issue matters even though collections under the tax are not scheduled to begin until 2029. If voters approve I-645, the tax would not take effect at all. If voters reject the initiative, the state expects the levy to raise more than $3 billion a year from an estimated 25,000 households.

What Changed

The largest new political check came from the Washington Education Association, which contributed $2 million last week to the campaign against I-645, bringing the teachers union’s total giving to $3 million. The Tribune reported that this made the union the largest single donor so far in the ballot fight.

Other labor groups have also written large checks. SEIU 775, which represents long-term care workers, has donated nearly $2 million to the anti-repeal campaign, and the state employees union has given $1 million. Those contributions are helping fund television ads opposing I-645 that began airing this week.

On the other side, the Vote Yes Repeal the Income Tax campaign had raised $1.3 million, according to the Tribune’s tally. Let’s Go Washington, which ran the signature drive to qualify I-645 for the ballot, had raised another $3.7 million, though some of that money also supports other initiatives.

The underlying tax is straightforward at a high level: a 9.9% levy on annual household earnings above $1 million. Supporters call it a millionaires tax. Opponents argue it undercuts Washington’s long-standing position as one of nine states with no income tax.

Who Is Affected

The immediate tax exposure falls on high-income Washington households with earnings above the $1 million threshold. The state projects roughly 25,000 households would pay the tax if it survives. Because the levy applies only to earnings above $1 million, the political argument is centered on a relatively narrow group of taxpayers, even though both sides are framing broader economic effects.

Public-sector unions have a separate stake because most of the proceeds are slated for the general state operating budget, with 5% earmarked for childcare and early learning subsidies. Some of the revenue would also fund an expansion of the Working Families Tax Credit. Union leaders argue repeal would leave a multibillion-dollar hole in the budget that supports schools and other services.

Business owners and investors opposing the tax are making a different case. The Tribune reported that some donors and spokespeople for the repeal effort say the measure could encourage high earners and businesses to relocate or pull back on investment in Washington. Gov. Bob Ferguson, meanwhile, has publicly vowed to veto any effort to expand the tax to lower income brackets.

The After-Tax Math

For high earners, the key number is the 9.9% rate on earnings above $1 million. The tax is described in the Tribune’s reporting as applying to annual household earnings over that threshold.

Those examples are simplified illustrations based only on the threshold and rate reported by the Tribune. They do not address how Washington defines taxable earnings in the statute or how the levy may interact with other state or federal tax items. But they show the size of the issue for households near and well above the line.

At the state level, the stakes are also large. If the tax remains in place, the state projects more than $3 billion a year in revenue. Spread across the estimated 25,000 affected households, that implies a substantial average burden, though actual liability would vary widely by income level.

Moves to Discuss With Your Advisor

Because collections are not set to begin until 2029, households that may be affected still have time to monitor how the ballot measure turns out and how the tax is implemented. For executives, founders, and business owners with uneven income, one issue may be the timing of large compensation events or liquidity events in years when household earnings could exceed $1 million.

Households in that situation often consider modeling several scenarios with a CPA or financial planner: one in which I-645 passes and the tax is repealed, and another in which the tax remains and applies beginning in 2029. That may be especially relevant for residents with expected stock sales, concentrated business income, or other one-year spikes in earnings.

For business owners, the policy debate may also affect location and hiring discussions, though the Tribune’s reporting makes clear that some large employers, including Microsoft and Amazon, have stayed on the sidelines in this campaign so far.

What to Watch Next

The next milestone is the November vote on Initiative 645. Between now and then, campaign spending will be worth watching, particularly whether the repeal side narrows the funding gap or whether labor and allied groups continue to dominate the airwaves.

Affluent Washington households may also want to watch whether the public debate stays focused on the current 9.9% tax on earnings above $1 million or broadens into a larger fight over future tax proposals. Opponents of the tax say it could expand over time, while supporters reject that argument, and Ferguson has said he would veto expansion to lower brackets.

For now, the practical takeaway is simple: Washington’s high-earner tax is not yet collecting revenue, but the political fight over it is already expensive, and the November result will determine whether that future state tax bill ever arrives.

After TAX is an independent publication. Articles are general information, not tax, legal or investment advice. Consult a licensed professional about your situation.