House Finance Committee advances millionaires tax bill to full vote

February 27, 2026 - 23:14

A landmark proposal to institute the first-ever income tax in Washington state has cleared a critical hurdle. The House Finance Committee voted to advance the bill, setting the stage for a full vote in the state House of Representatives.

The legislation, often called the "millionaires tax," would impose a 1% tax on annual capital gains earnings exceeding $250,000. This specifically targets profits from the sale of assets like stocks and bonds, not wages or salaries. Proponents argue the measure is a necessary step toward addressing the state's notoriously regressive tax structure, which currently relies heavily on sales and property taxes. They contend it will generate substantial revenue for essential public services, including education and childcare, from those most able to pay.

Opponents, however, have vowed a legal challenge, arguing the tax is unconstitutional under Washington law and could discourage investment. They also express concern that it could be expanded in the future to cover more residents.

With the committee's approval, the bill now moves to the full chamber, where its fate will be decided. If passed by the legislature, it would mark a profound shift in Washington's fiscal policy, ending its long-standing status as one of the few states without a personal income tax. The debate is expected to intensify as lawmakers consider this historic change.