Washington millionaires debate the state’s millionaire tax

Residents in Washington state don’t pay a state income tax, but when they fill out their ballots on Nov. 3, they will vote on whether some of the state’s wealthier residents should.

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Earlier this year, the Washington Legislature passed a Senate bill, SB6346, imposing a 9.9% tax on household income above $1 million, beginning in January 2028.

The “millionaire tax” only applies to income above $1 million per year and is expected to generate approximately $3.5 billion per year in revenue, according to numbers released by Washington state Senate Democrats. The tax would be paid by around 20,000 households in the state, less than 1% of the wealthiest households in Washington.

But a new , which is on November’s ballot, would repeal the language in the bill that establishes the tax.

A “yes” vote on the initiative supports repealing the provision and moves to prohibit future taxes on income, which the initiative defines as “any gain or benefit measured in money derived from an individual’s capital, labor, property, or other source.”

A “no” vote opposes repealing the provision and moves to uphold the law in its entirety.

Millionaires are weighing in on both sides of the issue.

Hedge fund manager vs. ‘Jeopardy!’ host: Millionaires argue over the millionaire tax

Brian Heywood, the hedge fund manager and founder of the Let’s Go Washington PAC, sponsored the initiative and is the largest donor supporting it.

Heywood moved his business to Washington nearly two decades ago, drawn to the area because of the lack of capital gains tax and income taxes. Now, Heywood said, recent legislation has “obliterated” those benefits.

Heywood said that “just with the suggestion” of an income tax, people are starting to “flee the state.”

“And I don’t particularly want to — I don’t want to be chased out of the state by people that are greedy …that can’t control their spending,” he said.

Ken Jennings, the host of “Jeopardy!”, joined in on the opposite side of the debate with an ad that said the initiative would make Washington’s “unfair” tax system “even worse.”

“I’m Ken Jennings, host of ‘Jeopardy!’, here with a pop quiz. Did you know Initiative 645 would give millionaires and billionaires a $13 billion tax break?” Jennings said in the ad. “It doesn’t take a quiz show host to know 645 is wrong for Washington. Vote no.”

Proponents of the initiative say the income tax will be expanded beyond just millionaires. Legislators say it won’t

Supporters of the initiative worry the $1 million cut-off will be lowered to impose state income taxes more broadly, as has happened in other states.

“I absolutely think they’re bringing this down,” Heywood said. “And they’ve given us all the signals that that’s what they’re going to do.”

In addition to adding the millionaire tax, SB6346 amended statutes governing Washington’s public retirement systems, making pension, disability, and death benefits subject to the tax.

Most pensions, disability and death benefits do not exceed $1 million, but Heywood said the fact that they were included in the taxable income is a “wink wink signal” that the $1 million bar will eventually lower to an amount that includes those incomes.

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“From what I can tell, public pensions have about $350 billion of untaxed money in them, and I just think that’s too big and fat, juicy of a target for the legislature to leave alone,” Heywood said.

Let’s Go Washington, Heywood’s PAC, said in a statement to the Deseret News that the tax is “not a narrow tax on the wealthy.”

“It traps 90 percent of our family-owned businesses and farms,” the PAC said. “State lawmakers also repeatedly rejected efforts to lock the threshold into law when passing SB-6346, ensuring there is nothing stopping it from being expanded to everyone.”

Washington Gov. Bob Ferguson has said that he will not support an income tax for people who make less than $1 million a year.

“So long as I am Governor I will veto ANY attempt to lower the threshold or raise the rate of this tax — we are asking those who make the most to pay a little more, and providing relief to workers and small businesses,” Ferguson said on X. “Let’s keep it that way.”

Opponent say the millionaire tax is needed to fund ‘important programs that families rely on’

Those opposing the initiative say that repealing the millionaire tax would result in cuts to the government programs that could be funded by the revenue the tax would provide.

“Initiative 645 is an attempt by hedge fund mogul Brian Heywood and his wealthy friends to lower their own taxes at the expense of everyone else in Washington state. By repealing the Millionaires Tax and giving the wealthiest one percent a tax cut, I-645 would blow a $13 billion hole in our state budget. This would result in serious cuts to K-12 education, health care, child care, and other important programs that families rely on,” said Erik Houser, a spokesperson for No on 645, the committee leading the campaign against the initiative, in a statement to the Deseret News.

Heywood said he has spent more money “trying to fix Washington” than he would get back in tax cuts.

“I just think that this is destructive on the economy and we’re losing businesses and punishing people that are successful,” Heywood said.

Houser said the initiative would make it “all but impossible to retain all of the tax cuts that came with it,” including those for working families and small businesses.

“For these reasons, a large statewide coalition of nurses, teachers, and small business owners have come together to oppose I-645,” Houser said.

A look at the millions of dollars raised for the millionaire tax debate

As of October, about $13.1 million has been raised for and against the initiative, with $7.7 million supporting it and $5.4 million opposing it.

Heywood is the largest donor in support of the initiative and has contributed about $2.23 million to the effort, according to data released by Ballotpedia.

The largest donors opposing the initiatives are the Washington Federation of State Employees and the SEIU 775 Ballot Fund, which have each contributed $1 million. Neither group immediately responded to a request for comment.

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Washington residents will vote on the initiative on Nov. 3.