Skip to content
Thursday, October 29, 2026 · Today’s edition, 6:30 a.m. ETThu, Oct 29 · 6:30 a.m. editionSign inMy Desk 0EditionsSign in

Washington voters to decide in November whether to block 9.9% tax on income above $1 million

The tax is not scheduled to take effect until 2028, and for some Seattle earners the combined top state and local rate could reach 18.037%.

At a glance

  1. Initiative 645 would reverse the legislature's decision and prevent the tax from taking effect, according to a Tax Foundation analysis published Oct. 15.
  2. The tax applies to individuals or couples with incomes above $1 million at a 9.9 percent rate.
  3. For some Seattle high earners, the Tax Foundation calculates a combined top state and local rate of 18.037 percent, which it says would be the highest in the country.

Washington voters will decide in November whether to block the state's new income tax on high earners, which is not scheduled to take effect until 2028. Initiative 645 would reverse the legislature's decision and prevent the tax from taking effect, according to a Tax Foundation analysis published Oct. 15.

The tax applies to individuals or couples with incomes above $1 million at a 9.9 percent rate. The Tax Foundation expects it to fall largely on small business owners and highly compensated tech workers.

For some Seattle high earners, the Tax Foundation calculates a combined top state and local rate of 18.037 percent, which it says would be the highest in the country. That figure stacks the 9.9 percent state tax with a 5 percent Seattle Social Housing Tax, a 2.557 percent Seattle JumpStart Tax and a 0.58 percent WA Cares tax, split across employer and employee.

In 2024, according to the Tax Foundation, lawmakers approved a measure barring the state and its local jurisdictions from taxing personal income, rather than letting voters decide. Because amending language adopted by ballot measure requires a two-thirds legislative supermajority for the first two years, the early 2024 vote let lawmakers return during the 2026 session, rather than in 2027, to adopt the income tax.

The new tax carries an emergency clause, asserting it was "necessary for the support of the state government and its existing public institutions." That shielded it from a voter referendum, so opponents filed an initiative to repeal the tax instead.

A date has been set for oral arguments in a constitutional challenge to the law; Washington had no income taxation until recently, and its constitution has previously been interpreted as largely prohibiting it. Separately, a state lawmaker recently proposed lowering the threshold to as low as $250,000.

A client whose income lands above the $1 million threshold would face the 9.9 percent tax. The Tax Foundation's profile—pass-through owners and heavily compensated tech employees—is exactly the population whose income swings year to year.

If Initiative 645 passes in November, the tax never takes effect. If it fails, the tax is scheduled to begin in 2028 with the constitutional challenge still unresolved.

How Seattle's 18.037% top rate is built

Combined top state and local rate, components stacked

  • WA state income tax (new, 2028)9.9%
  • Seattle Social Housing Tax5%
  • Seattle JumpStart Tax2.56%
  • WA Cares tax0.58%
Source: Tax Foundation, Oct. 15 analysis · rate components sum to 18.037%
Show as table
ItemValue (%)
WA state income tax (new, 2028)9.9%
Seattle Social Housing Tax5%
Seattle JumpStart Tax2.56%
WA Cares tax0.58%

Reported by the Tax & estate planning desk from Tax Foundation. Published . Corrections

Related

Advisors

Tax Foundation: bonus depreciation shifts corporate tax burden to economic profits

The Oct. 21 analysis says immediate expensing preserves a deduction's full value and removes the tax burden on the return needed to break even.

Advisors

Tax Foundation says California billionaire tax pitch keeps shifting

An Oct. 16 op-ed focuses on advocate Gabriel Zucman's description of Proposition 40 as a one-time levy, without offering a new revenue figure.

Advisors

Tax Foundation says Florida Amendment 3 would cut the local property tax base

The analysis says the amendment would leave the cost of local public services in place while removing a significant portion of that base.

Advisors

Grandchild does not qualify as an eligible IRA beneficiary

All three beneficiaries of the 84-year-old's IRA fall under the 10-year rule, and Brenner separates the two Roth five-year clocks.

Advisors

Advisors should read each DST ownership line against the estate plan

Whether a spouse's share avoids probate depends on how the subscription agreement was titled.

Wealth Advisor Dailyfrom Private Wealth Daily

Practice management, recruiting, RIA M&A and the platforms advisors run on. Daily at 6:45 a.m. ET.

Free. Every morning. Unsubscribe from any edition in one click.

From other sections