The proposal would tax the wealthiest people in the state, based on annual income.

OLYMPIA, Wash. — Saying it’s time for a “historic change in the tax structure,” Gov. Bob Ferguson announced his support for a millionaire tax on the wealthiest people in Washington state on Tuesday. 

Under the proposal, which will be presented to the Legislature this session, people who make $1 million of income in a year would be taxed. It would not impact those whose net worth reaches $1 million.

RELATED: Gov. Ferguson’s proposed budget includes further cuts to state agencies, higher education

This, according to Ferguson, would impact .5% of Washingtonians, he said. It would raise at least $3 billion a year. 

Ferguson said the state must use gains from the tax to return money to working families and small businesses. That could be done by expanding eligibility for the Working Families Tax Credit. The state could also not require small businesses pay B&O taxes until they make $1 million, for example.

Ferguson said revenue from the millionaire tax should also be used, for example, to provide more K-12 funding and eliminate sales taxes on essential personal hygiene products and essential clothing items.

Ferguson said the revenue raised should also support K-12 education and small businesses, for example.

Ferguson said Washington state continues to have one of the most regressive tax systems in the country, meaning those who make the least amount of money end up paying larger shares of their income in taxes. According to Ferguson’s office, families whose income is in the bottom 20% pay 13.8% of their total income in taxes. Those in the top 1% pay 4.1% of their income in taxes.

Ferguson said the proposal would take into account inflation, and that his office would work to make sure the tax never impacts 99% of residents.

The announcement was made during a press conference in which Ferguson released his proposed 2026 supplemental budget. However, the budget does not rely on the proposed tax. If the tax is adopted this legislative session, the state wouldn’t see proceeds from it until 2029, according to the governor.

Rep. Travis Couture, R – Mason County, is the top Republican on the budget writing committee.

“We don’t have a revenue problem,” said Couture. “What we have is a spending problem.” 

Couture said creating a new income tax is not needed, and is illegal in the state. 

”It is solely unconstitutional, and the voters of Washington state, including myself, have said multiple times over and over and over again that they do not want income taxes in this state.”