Marshall commentary: Governor must stop economically illiterate income tax before Washingtonians force a reckoning

Washington’s political class pretends it can pile on new taxes without consequence, but the numbers — and the moving vans — tell a different story.

A new 9.9% tax on personal income over $1 million is billed as the “millionaires’ tax,” but business groups and relocation data already show that high earners and investors are voting https://docs.google.com/document/u/0/?authuser=0&usp=docs_webwith their feet.

A February 2026 survey by the Association of Washington Business found that 44% of business leaders are considering moving their personal residence out of state, and the share actively looking to relocate has nearly doubled following recent capital gains and income tax experiments.

Real estate brokers in Nevada report a “full-scale migration of wealth” from Washington, noting the cumulative tax burden is pushing relocations into overdrive.

When a single high-profile relocation can save an individual nearly $1 billion a year in avoided taxes — more than Washington collects in capital gains taxes in a year — you do not have tax policy; you have a self-inflicted hemorrhage. You cannot sustain an $81 billion biennial budget on a shrinking base of job creators while treating their success as a problem to be solved rather than an asset to be welcomed.
This fiscal instability is compounded by the fact that for a century, Washington’s constitution has been clear: income is “property,” and property taxes must be uniform.

In Culliton v. Chase (1933), the state Supreme Court struck down a graduated income tax as unconstitutional because income must be taxed uniformly.

The new “millionaires’ tax” is a graduated income tax by another name. Proponents can slap whatever label they want on the bill, but a 9.9% levy on personal income is an income tax for constitutional purposes.

Now lawmakers are doubling down with a direct personal income tax that is even harder to disguise. They are not just testing the limits of judicial patience; they are trampling on the explicit text Washingtonians have repeatedly defended at the ballot box. A government that openly disregards its own constitution will not retain public trust.

Beyond the constitutional concerns, supporters insist this income tax is about “fixing” Washington’s regressive tax code. However, their solution is a mirage.

The millionaires’ tax could generate about $6 billion a biennium once fully implemented. That means over 90% of the $81 billion tax burden still comes from the same sales, property, and B&O taxes that working families already struggle under.

Meanwhile, instead of using this new revenue to provide relief, lawmakers are piling on even more. Just this session, Democrats passed bills that impose a new covered-lives tax and expand taxes on insurance-related services — along with higher taxes on prescription drug businesses and banks — costs that will ultimately be passed on to Washingtonians through higher premiums, higher prices, and a higher cost of living.

Calling that package “progressive” is like calling a payday loan a safety net. It is still the same working families paying more at the register and the same small-business owners squeezed on every gross receipt.

The most damning indictment, however, is practical. Democrats sold the capital gains tax — and now the millionaires’ income tax — as necessary to fund education and the social safety net.

Yet, they recently cut $250 million from education and made state-level reductions to Medicaid and related services of over $1 billion, even as health care costs continue to climb. If you adopt a tax touted as a dedicated solution for schools, then cut them anyway, you have confessed the tax was never really about fixing regressivity. A $6 billion stream into an $81 billion budget is a rounding error dressed up as structural reform.

As a practicing clinician and small-business owner, I see what that means: less access, more closures, and patients falling through the cracks so Olympia can keep pretending the spreadsheets balance.

If the governor signs this tax, he will endorse a constitutional end run and a cynical bait-and-switch on education. Washington has already seen that capital flight is real. Wealthy residents and high-growth companies are already moving. When they leave, they take jobs, philanthropy, and investment with them. The burden then falls even more heavily on those who cannot relocate.

At some point, taxpayers will find their own harbor and symbolically dump Olympia’s tea overboard.

Governor, veto it, force the Legislature back to the drawing board, and demand real tax reform that reduces regressivity by cutting sales and B&O taxes instead of layering new levies on top. Do the right thing now, before Washington’s taxpayers stage a modern-day Boston Harbor in the shadow of Mount Rainier.

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Rep. Matt Marshall, R-Eatonville, represents the 2nd Legislative District in the Washington State House of Representatives. He is a practicing clinician and a small-business owner.