Millionaires Tax now goes to the courts after apparent repeal failure

Key Points:

• Initiative 645, which aimed to repeal Washington's 9.9% income tax on millionaires starting in 2028, appears to have failed based on early election returns despite significant opposition spending nearly $13 million on the "NO" campaign and influencing State Supreme Court races.
• Supporters like State Senator Jamie Pedersen view the results as a mandate to reform the tax code for fairness, while opponents expect ongoing legal challenges, with the case headed to Superior Court and potentially the State Supreme Court for a final decision on constitutionality.
• I-645 sponsor Brian Heywood argues the tax is unconstitutional and criticizes political influences on key figures, while Attorney General Bob Ferguson, a proponent of the tax, remains optimistic about its legality and opposes lowering the millionaire threshold or imposing a payroll tax.
• The debate has raised concerns among business and philanthropic leaders, including Microsoft President Brad Smith, about potential job losses if additional taxes like a payroll tax are introduced, which Ferguson has firmly ruled out for now.
• Looking ahead, Pedersen anticipates discussions about replacing Washington's business and occupation tax with a more conventional corporate net income tax, leveraging the new flexibility provided by the voters' decision on the millionaire tax.