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Washington’s 1% Wealth Tax Proposal: What Inslee Proposed for Residents and Businesses

Former Gov. Jay Inslee proposed a 1% tax on worldwide wealth above $100 million, plus B&O tax increases for some businesses. The proposal was not enacted; Washington later passed a separate income tax law.
From TheFinanceBase Team3 min to read
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Former Washington Gov. Jay Inslee’s December 2024 budget proposal called for a 1% tax on worldwide wealth above $100 million and higher business and occupation (B&O) taxes for some businesses. It was a proposal—not enacted tax law—and it is distinct from Washington’s later 2026 income tax law.

What did Inslee propose?

In its proposed 2025–27 budget, the Washington State Office of Financial Management (OFM) described a 1% tax on worldwide wealth above $100 million. OFM estimated that roughly 3,400 of Washington’s wealthiest individuals would be affected and projected $3.4 billion in revenue for public services. Those are estimates attached to the proposal, not evidence of collected revenue. Washington State Office of Financial Management

The Associated Press (AP) separately reported that Inslee said the wealth tax would affect about 3,400 residents and raise $10.3 billion over four years. That four-year projection differs in time frame from OFM’s $3.4 billion estimate; neither figure represents revenue actually raised. The Associated Press

The proposed tax base was worldwide wealth, not annual income or the value of a Washington home alone. The $100 million threshold means the proposal was aimed at very high-wealth individuals, not residents generally.

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Which businesses would have faced higher B&O taxes?

The proposal also included changes to Washington’s B&O tax. AP reported that the changes would primarily affect approximately 20,000 companies in the “service and other activities” category with annual income above $1 million, including businesses such as law and accounting firms. That is a specific group of B&O taxpayers, not businesses across the board. The Associated Press

AP described a proposed rate increase from 1.75% to 2.1% for October through December 2026, followed by a 10% increase to all B&O rates beginning in January 2027. It also reported that some businesses might see no change because of thresholds or small-business credits. These were historical proposal details; they should not be treated as a statement of current business tax obligations.

Why did Inslee support the wealth tax?

Inslee framed the proposal as a response to economic inequality. AP quoted him saying, “The state and the nation has to respond to this inequity beyond human imagination,” and that communities could not remain healthy and robust amid poverty and want alongside enormous wealth. This was the proposing governor’s advocacy for the measure, not an independent finding. The Associated Press

What objections were raised?

AP reported opponents’ argument that Washington had a spending problem rather than a revenue problem. It also reported a valuation concern raised by Jared Walczak, vice president of state projects at the Tax Foundation: privately held businesses and other assets that do not trade publicly can be difficult to value. These were arguments raised about the proposal, rather than settled conclusions about how it would have worked. The Associated Press

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How is the 2026 income tax different?

Washington enacted SB 6346 in 2026, creating a 9.9% tax on individual income above $1 million beginning in calendar year 2028. The law is an income tax, not the proposed 1% tax on wealth; the two are separate measures. The Legislature says 7% of the law’s revenues are dedicated to city and county public defense services. Washington State Legislature

Gov. Bob Ferguson’s signing announcement says the tax does not apply to income below $1 million, the first $1 million of income for people who owe it, or assets such as homes and property. The announcement also says fewer than one-half of one percent of Washingtonians would pay the tax. Office of Governor Bob Ferguson

Feature Inslee’s 2024 budget proposal 2026 enacted law
Tax base Worldwide wealth Individual income
Threshold Wealth above $100 million Income above $1 million
Rate 1% 9.9%
Timing Proposed for the 2025–27 budget; proposed B&O changes included dates in 2026 and 2027 Income tax begins in calendar year 2028
Business-tax changes Proposed B&O changes for certain taxpayers Not the wealth-tax proposal’s B&O changes
Status Budget proposal, not enacted law Enacted as SB 6346; repeal initiative certified to the ballot as of October 4, 2026
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What is the status of the repeal initiative?

As of October 4, 2026, the Washington Secretary of State’s voter information page lists Initiative Measure IP26-645 as certified to the ballot. Its summary says the measure would repeal the 9.9% tax on annual individual income above $1 million. The ballot outcome is not established here, so certification should not be mistaken for repeal or for a final election result. Washington Secretary of State voter information

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