Washington Enacts 9.9% Levy, Ending No-Income-Tax Era
Washington's legislature has passed a landmark bill that imposes a 9.9% income tax on household earnings exceeding $1 million annually. The measure, set to take effect in 2028, ends the state's long-held identity as one of only nine U.S. states without an income tax. Once signed by Governor Bob Ferguson, who has publicly supported the bill, Washington will have the fifth-highest income tax rate in the country.
Proponents, including Democratic House Finance Committee Chair April Berg, state the tax will fund education, healthcare, and public safety, arguing it modernizes a regressive tax code. Governor Ferguson noted the tax would apply to "less than one half of one percent of Washingtonians." However, the bill directly challenges a 1933 state supreme court precedent classifying income as property, setting the stage for a significant legal fight over its constitutionality.
Data Shows Economic Decline Followed 11 Similar State Taxes
Historical analysis reveals that the 11 states that introduced an income tax since 1960 all subsequently underperformed the rest of the nation across key economic metrics. For example, since Michigan adopted its income tax in 1967, its share of total state and local tax revenue nationwide has declined by 53%. Similarly, Pennsylvania’s share of national output has fallen 42% since it enacted an income tax in 1971.
This historical precedent fuels concerns of capital flight from Washington. A recent Association of Washington Business survey found that 44% of business leaders are considering moving their personal residence out of the state, while 17% are contemplating relocating their businesses entirely. These concerns are amplified by the recent relocations of high-profile residents like Starbucks founder Howard Schultz and Amazon founder Jeff Bezos to Florida, a state with no income tax.
New 'Jock Tax' Threatens Seattle's Pro Sports Teams
The new tax structure creates a significant financial disadvantage for Seattle-based professional sports franchises in attracting top talent. High-earning athletes will now face a 9.9% state tax, making teams in no-tax states like Florida and Texas financially more appealing. This is particularly problematic for teams in leagues with a hard salary cap, like the NFL's Seattle Seahawks, as they cannot increase player salaries to offset the new tax liability.
This will undoubtedly scare some players away, no matter how good or well managed/coached the Seahawks are. It could also lead to a situation where Seattle is forced to “overpay” in order to help offset what the players will lose thanks to the “millionaires tax.”
— John Schneider, General Manager, Seattle Seahawks.
While teams in Major League Baseball, like the Seattle Mariners, can offer larger contracts, doing so increases operating costs and can impact overall profitability and competitiveness.
Edgen Stock·Mar 19 2026, 02:56