Ferguson vows to veto any expansion of WA ‘millionaires tax'

As an initiative to repeal Washington's new income tax on households earning more than $1 million gains steam, Gov. Bob Ferguson is vowing to veto any effort to expand the levy to less-wealthy people.

In a post on X Wednesday, Ferguson acknowledged the public is likely to get a say on the income tax this November. And he sent a political message aimed to reassure voters skeptical that the tax will stay confined to the richest residents.

One more thing voters should know: so long as I am Governor I will veto ANY attempt to lower the threshold or raise the rate of this tax - we are asking those who make the most to pay a little more, and providing relief to workers and small businesses. Let's keep it that way," Ferguson wrote.

In one sense, Ferguson's pledge was not new. He and other top Democrats have publicly stated they have no plan to lower the $1 million threshold. The new tax law includes a built-in inflation adjustment so that income limit will rise.

But the timing of the governor's message indicates nervousness among Democrats that what they've marketed as a "millionaires tax" will be rejected by nonmillionaire voters if they suspect they'll eventually pay it too.

Ferguson's promise was promptly mocked by backers of the initiative campaign that is now gathering signatures to repeal the high high-earners income tax.

Brian Heywood, the Redmond hedge fund manager helping bankroll the anti-income-tax initiative aimed for the fall ballot, said Ferguson and his allies have lost "all credibility" on the tax issue.

"It is clear from the voices we hear signing our initiatives no one believes him. This feels like typical dishonest pandering and damage control. Lipstick on a pig," Heywood said in a text message.

State Rep. Travis Couture, R-Allyn, responded to Ferguson on X.

"Voters are going to obliterate this unconstitutional and extremely damaging income tax. Stop trying to torch our economy and send jobs and business to Tennessee," he wrote, referring to recent news of Starbucks sending jobs to that state.

The new 9.9% tax applies to household incomes of more than $1 million, affecting an estimated 21,000 filers. If it survives a lawsuit challenging its constitutionality and the anticipated public vote, the tax would start on 2028 income, with the first payments due in 2029.

Ferguson signed the new tax into law in March after it was passed by the Democratic-majority Legislature. It is projected to raise $3 billion to $4 billion a year, with most of the money dedicated to the state's operating budget, which funds K-12 schools, universities, healthcare and other services.

Washington is one of nine states with no current income tax. Voters have rejected previous income tax proposals 10 times over the past nine decades, most recently in 2010.

Backers of the new tax say polling shows public support for taxing millionaires to fund public services. They've pointed to the overwhelming vote that upheld the state's new capital gains tax on the state's wealthiest residents in 2024.

But Heywood and other income-tax opponents say they've had no trouble gathering signatures for their initiative to repeal the new tax. They need to submit 308,911 verified signatures from registered voters by July 2 to qualify for the November ballot.

Heywood said Wednesday the campaign is off to a fast start, obtaining 92,000 signatures in its first week - "a whole lot of nonmillionaires lining up to sign.

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