Opinion: Washington’s New State Income Tax Must Be Repealed

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This fall, Washington state voters will once again have to defend their economic future and core competitive edge by voting yes on Initiative 645 to repeal the state income tax.

Earlier this year, state lawmakers established the new state income tax. Supporters claim that this tax will only impact higher-income earners. But the measure includes broad new income taxing powers that make every Washingtonian and those doing business in the state a target.

How do we know this? Legislators have made it clear by their actions — and actions speak louder than words!

Most notably, the income tax was written specifically to cover pensions, reversing Washington’s previous commitment to not tax pension retirement income. While teacher, firefighter and other pensioners are not initially paying the state income tax, the only reason to make their income subject to the tax is to require them to pay when it is lowered to apply to them.

Second, Olympia actually voted twice on the income tax — once to pass the income tax, and a second time to ensure they could expand it to everyone. They wanted to make clear their intent to voters.

Finally, the income tax is already driving people out of the state, which will result in lower tax revenues. We can be confident that Sen. Jamie Pedersen (who has stated publicly that he supports a universal income tax on all Washingtonians) and the Legislature will use that shortfall as justification to apply the tax to many more Washingtonians. So, unless you vote yes on I-645, you can expect to pay the income tax soon.

Even the state’s most prominent Democrats are calling out Olympia’s runaway spending. Former Gov. Christine Gregoire told Washington business leaders recently that Olympia has “a spending problem, not a revenue problem,” noting the state budget has grown from $33 billion to $80 billion since she left office. Former Gov. Gary Locke, similarly, called Olympia’s spending “out of control.”

“Washington cannot afford to follow the path of states like New York and Oregon, where out-of-control spending leads to higher taxes and an increasingly difficult climate for families and businesses.”

Two Democratic governors, sounding the same alarm, should tell legislators to focus on spending cuts, not tax increases. But, instead of looking for savings, Washington’s political leaders passed the largest tax and spending increase ($9.3 billion) in state history in 2025, and then followed it up with another $2.3 billion spending increase in 2026.

The pattern is as clear in Washington as it is in other states that are falling behind competitively: no matter how much citizens hand over in taxes, legislators always think it’s never enough. Giving lawmakers even more of our tax dollars when they have failed to responsibly manage what they have hurts everyone in the state.

Beyond the impact to personal paychecks, there are two long-term consequences that will negatively impact voters — whether they pay the tax or not.

First, job creators and job opportunities are leaving the state. National IRS migration data already shows high earners leaving high-tax states at an accelerating rate. Washington ranks sixth highest in the nation for losing higher-income residents, and a state income tax will accelerate this trend. A 2026 Association of Washington Business survey found nearly 1 in 4 Washington employers are now considering relocating out of state, nearly triple the rate from just a year earlier.

Companies such as Starbucks, moving a large share of its corporate workforce to Nashville, are shifting operations and jobs out of the state in response to the increasingly hostile tax climate and the costs of doing business. Sadly, the result is that Washington has an unemployment rate hovering near 5%, tied for sixth highest in the country and nearly a full percentage point above the national average.

Second, avoiding the tax effectively means cutting all ties to Washington. Under the new law, it appears taxpayers can only shed their Washington domicile by spending 30 days or fewer in the state a year and selling their home. It’s no surprise active home listings are up an average 27% in much of Washington this year.

This rule is also an existential threat for the state’s largest nonprofits, as financial advisors are already telling clients the “gold standard” for anyone trying to sever ties is to stop philanthropic giving in Washington entirely.

The last time Washingtonians voted on an income tax was in 2010. That income tax proposal, I-1098, was rejected by a 64%-36% voting margin. Companies including Microsoft, Boeing and Expedia, as well as the founders of Amazon and T-Mobile, supported the effort to stop the income tax. They were right to do so for the benefit of their employees and the citizens of Washington.

In the years since, economic growth and investment enabled the state spending budget to dramatically increase from under $30 billion to more than $80 billion without an income tax. Washington cannot afford to follow the path of states like New York and Oregon, where out-of-control spending leads to higher taxes and an increasingly difficult climate for families and businesses. We need a state that can compete!

This November, voters have the opportunity to send a message to politicians by doing what they have done time and again: vote yes on I-645 to repeal the state income tax and help Washington succeed for generations to come.