Washington’s New “Millionaire’s Tax” Is Now Law — And the State Is Racing California to the Bottom
- Rex Ballard
- 5 days ago
- 2 min read
Olympia, WA — On March 30, 2026, Governor Bob Ferguson gleefully signed Senate Bill 6346 into law, imposing a 9.9% income tax on Washington households earning more than $1 million a year. The so-called “Millionaire’s Tax” takes effect January 1, 2028.
Governor Ferguson signs Millionaires' Tax into law | Governor Bob Ferguson
Watch mortgage advisor Connor Webb’s pinned video breakdown (the one driving the conversation right now):
As Webb explains in the video, this isn’t just a tax on the rich — it’s a game-changer that wipes out Washington’s last major tax advantage over high-tax neighbors like Oregon and California. Clark County residents and businesses are already feeling the shift.
Tax Foundation Rankings: Washington Was Already Bad — Now It’s Getting Worse
The Tax Foundation’s 2026 State Tax Competitiveness Index currently ranks Washington 45th out of 50 states. Here’s how the bottom of the list looks today:
41st: Hawaii
42nd: Vermont
43rd: Massachusetts
44th: Minnesota
45th: Washington
46th: Maryland
47th: Connecticut
48th: California
49th: New Jersey
50th: New York
Because SB 6346 was signed after the 2026 Index cutoff date, the 2027 edition will reflect the new law. Analysts expect Washington to plunge to 47th–49th overall — putting it in a dead heat with California or New Jersey for the worst tax climate in America.
Washington State is clearly not content to lag behind California on lists of the worst economic states to live and do business in. It’s racing to catch up — and possibly overtake them.
History Repeats: “Narrow” Taxes Never Stay Narrow
Webb’s video drives home a lesson history has taught us over and over: these “soak the rich” taxes almost always broaden. The federal income tax started tiny in 1913. California’s 2004 millionaire tax, New York’s repeated hikes, New Jersey’s bracket creep, and Massachusetts’ 2022 surtax all followed the same path — start narrow, then expand when more revenue is needed.
Washington voters have rejected income tax proposals ten times since 1934. Yet this bill passed with an emergency clause that bypassed a public referendum, and an amendment to lock the $1 million threshold was rejected. The door is now wide open for future expansion.
The Top 10 States People Are Moving Out of in the US - Business Insider
High-Profile Departures Are Just the Beginning
The exits have already started:
Starbucks relocated its headquarters to Nashville.
Fisher Investments moved its major operations to Texas.
Howard Schultz, the man who built Starbucks in Seattle, recently headed to Florida.
Clark County — long the winner of “Oregon arbitrage” where Portland workers crossed the Columbia River for lower taxes — now risks cooling demand as that advantage disappears.
Bottom Line
Washington’s political class just proved it would rather chase California down the rankings than learn from the Golden State’s mistakes. As the next Tax Foundation report drops and Washington slides even deeper into the bottom tier, the outmigration wave already underway will only accelerate.
Shasta Unfiltered will keep watching. When blue states race each other to the bottom, low-tax havens become the obvious escape hatch — and real families and businesses vote with their feet.
