Washington Voters to Decide Fate of 9.9% Income Tax on High Earners
Washington state voters will head to the polls on November 3, 2026, to decide whether to repeal a new 9.9% income tax. This tax, set to take effect in January 2028, targets individuals and joint filers earning over $1 million annually. The measure, known as Initiative 645, qualified for the ballot after a signature drive by the group Let’s Go Washington. The outcome of this vote could have significant implications beyond just taxing wealthy residents, potentially affecting other income-based funding mechanisms within the state.
Understanding Initiative 645 and the 9.9% Income Tax
Initiative 645 is a ballot measure that seeks to repeal a specific tax law passed by the state legislature earlier in 2026. This law imposes a 9.9% tax rate on the portion of annual income that exceeds $1 million. The tax is designed to apply to both individual and joint tax filers. If voters approve Initiative 645, the tax will be eliminated before it ever collects any revenue.
The legislation establishing this tax was signed into law on March 30, 2026, by Governor Bob Ferguson. It was part of a larger package of tax reforms. The proposed tax is scheduled to begin collecting in January 2028. However, the upcoming vote provides an opportunity for the public to directly influence whether this tax is implemented.
How Initiative 645 Expands Beyond the Millionaire Surcharge
The language of Initiative 645 extends beyond simply repealing the 9.9% tax on high earners. The measure also includes a broader restriction that could prevent state and local governments from imposing new taxes on individual income or any taxes that are measured by income. Supporters of the initiative argue this is a necessary safeguard to prevent the state from expanding income-based taxes to a wider population in the future. They view the current tax as a test case that could lead to broader tax increases.
Opponents, however, express concern that this broader language could negatively impact various state programs that rely on income-based funding. They point to potential effects on unemployment insurance, paid family and medical leave programs, and the WA Cares program. Their argument is that the ban on taxes “measured by” income could disrupt the funding for these essential services.
Financial Implications of Repealing the Tax
The fiscal impact of Initiative 645 is a major point of contention. State analyses estimate that repealing the 9.9% income tax would reduce state revenue by approximately $11.4 billion across the state fiscal years 2027 through 2031. This figure covers a period that begins before the tax is even scheduled to start collecting revenue. The legislation that created the tax also expanded various state programs and included other tax changes. If voters repeal the tax, lawmakers would need to find alternative funding sources for these commitments.
Conversely, proponents of repeal suggest that there could be administrative savings of about $150 million if the tax is repealed. The timing of these fiscal effects is notable, as the financial consequences of a repeal vote would begin before the tax itself would generate any income. This creates a budget challenge for the state even before the first dollar is collected.
Campaigns Mobilize Ahead of the Vote
Both sides of the debate are actively campaigning to influence voters. The campaign supporting repeal, organized by Let’s Go Washington, has been building momentum since qualifying the initiative. Steve Gordon, identified as a trucking executive, launched the Vote Yes Repeal the Income Tax committee. This campaign emphasizes that repealing the tax will limit the state’s ability to create future income-based taxes.
On the other side, opponents have raised significant funds, with public-employee unions being major backers of the campaign against repeal. These opposition committees have reported substantial financial contributions. Their message focuses on the potential threat to public programs and the revenue structures that support them if Initiative 645 is approved. The total spending by both campaigns is approaching $10 million, reflecting the high stakes of the upcoming vote.
The Future of the Tax Hinges on Voters and Courts
The outcome of the November 3 election will be a critical factor in determining the future of Washington’s 9.9% income tax. If voters approve Initiative 645, the tax will be repealed and will never be implemented. If voters reject the initiative, the tax will remain law, though its future could still be influenced by ongoing litigation. A constitutional lawsuit challenging the tax is currently pending, and its resolution could also affect whether the tax is ultimately collected.
Furthermore, future legislative sessions could bring further changes to the law. The ballot measure, however, addresses the tax before its scheduled start date, providing voters with an immediate say. The election result could significantly alter state revenue projections and funding decisions well before January 2028.
Frequently Asked Questions
What is Initiative 645?
Initiative 645 is a ballot measure that Washington voters will consider to repeal a recently passed 9.9% income tax on high earners and to prevent future income-based taxes.
Who would be affected by the 9.9% income tax?
The tax targets individuals and joint filers whose annual income exceeds $1 million.
When was the 9.9% income tax supposed to take effect?
The tax was scheduled to begin collecting revenue in January 2028.
What are the potential financial impacts of repealing the tax?
Repealing the tax is projected to reduce state revenue by about $11.4 billion over five fiscal years, potentially affecting state programs that rely on this funding.
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