Washington State's New Millionaire Tax

0:00On March 13th, Washington State Senate has approved a 9.9 percent tax on residents earning more than $1 million a year. Governor Bob Ferguson plans to sign the measure into law soon after its passage this week. The tax targets just 0.5 percent of taxpayers and could generate billions of dollars each year for education, health care, housing, and family tax credits. It would also cut sales taxes on items like shampoo. Payments start in 2029, following a rollout in 2028. The state has long avoided an income tax, with voters turning down similar ideas for decades. Supporters argue it taps high earners to fund public needs amid frustration with federal policies. Republicans call it a budget fix that won't work, and warn it could push out major companies headquartered there, like Starbucks. Speaking of Starbucks, founder Howard Schultz revealed the same day that he and his wife are relocating their family to Florida for retirement after decades in Seattle.

1:01Expect pushback soon, including a likely ballot initiative this November to repeal the tax and early legal challenges claiming it violates state rules on equal taxation. This could reshape the state's economic landscape in the years ahead.