May 1, 2026
What would it take to institute an income tax in Washington state?
It's one of only nine states without a traditional state income tax, although it does have a tax on capital gains for high-income earners (1). Most of those states are red; Washington is one of the few that's reliably blue (2).
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This is thanks to an almost 100-year-old court case called Culliton v. Chase, which declares that income is a form of property (3). The Washington Constitution requires that all types of property be taxed uniformly; these two rules combined have kept Washington from implementing a progressive income tax.
Recently leaked emails from a Washington state senator show that lawmakers are planning on attacking this decision through a millionaire's tax that was recently signed into law. The tax, which won't apply on income earned before 2028, would require residents who earn more than $1 million to pay a 9.9% tax on their earnings (4).
In the emails, Sen. Jamie Pedersen says to Washington Attorney General Noah Guzzo Purcell, "I welcome your thoughts and comments about what will give us the best shot to have Culliton overruled (4)."
If they're successful, Washington lawmakers could go on to institute a progressive income tax that applies to every Washingtonian, not just millionaires. But will this plan work? And if it does, will it reflect constituents' wishes?
The millionaire's tax is already facing several legal challenges — but that could be good for it
Even before the leaked emails were revealed, the millionaire's tax had already been challenged in court.
Two former Washington state officials, Rob McKenna and Phil Talmadge, filed a complaint saying the law was unconstitutional (5). Members of the Washington State GOP have also started working on repealing the law, hoping to have it on Washingtonians' ballots by November 2026 (6) allowing voters to "claw back the law before any revenue is made from it."
If lawmakers are ultimately hoping to use the millionaire's tax to strike down Culliton, then these challenges could work in their favor.
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In an email to a member of the Washington Senate Ways and Means Committee, Pedersen says, "I expect that the bill will get challenged in court. I would like to force the Washington Supreme Court to reconsider its caselaw that considers income to be property (7)."
Culliton might be struck down simply because it's an unconventional — and potentially faulty — ruling. Out of 50 states, only two consider income to be property: Washington and Pennsylvania. Additionally, according to retired University of Washington School of Law professor Hugh Spitzer, Culliton was based on a faulty reading of another court case, Aberdeen Savings & Loan Assoc. v. Chase (8). He says that all other U.S. Supreme Court decisions that relied on Aberdeen have since been reversed.
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Is this what Washingtonians want?
Washington residents have voted on state income taxes a total of eleven times (9). The first time, in 1932, an act that would introduce a graduated, or progressive, income tax passed by a landslide. It was later struck down by Culliton.
All other votes in favor of a personal or corporate income tax have failed (9). The most recent vote was in 2010 for Initiative Measure 1098, which would have taxed the adjusted gross income of some high earners.
But that wasn't the only thing the initiative contained — it also would have reduced state property tax levies, along with some business and occupation taxes. It's possible that voters who would have been in favor of a state income tax didn't approve of the other aspects of the initiative.
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The second-most-recent vote was almost 45 years ago, in 1982. It's likely that voters today have significantly different goals than voters back then.
But voters might not even get a chance to yay or nay the millionaire's tax. The signed bill has a section that reads, "The tax imposed in this act is necessary for the support of the state government and its existing public institutions (10)."
Attorney General Purcell calls this an "emergency clause" in the leaked emails, and he says that "without one, someone could try to subject the bill to a referendum (11)." A referendum would add the law to a ballot for voters to decide on.
Some are worried that this millionaire's tax and any progressive taxes that follow could cause rich Washingtonians to leave the state (12). As recently as 2023, Jeff Bezos left the state because it adopted a capital gains tax (13).
But a Stanford University study shows that, while "millionaire migration" does happen, it only happens "at the margins of statistical and socioeconomic significance (14)." The study says that millionaires actually migrate less than the general population on average, potentially because millionaires are more likely to have family and business responsibilities than the average person.
Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
The White House (1); 270toWin (2); Washington State Department of Revenue (3),(8); The Center Square (4),(7),(11),(12); KOMO News (5),(6); Washington Secretary of State (9); Washington State Legislature (10); KATV (13); American Sociological Association (14)
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Kit Pulliam is a DC-based financial journalist with over five years of experience writing, editing, and fact-checking financial content.
