Washington state income tax revenue projections revised upward

A new analysis from the Washington Department of Revenue indicates that the state’s proposed high-earner income tax could generate significantly more revenue than previously estimated. The revised projections suggest the tax will bring in $3.1 billion in its initial fiscal year and approximately $8.3 billion during the 2029-31 biennium. This is an increase from the original estimates of $2.7 billion for the first budget and $6.9 billion for the following two-year cycle.

The tax, which imposes a 9.9% levy on individual and household wage income exceeding $1 million annually, is scheduled to take effect on January 1, 2028. The Department of Revenue also found that 25,000 households would be subject to the tax, an increase from the 21,000 households originally discussed.

These updated figures will be presented to voters during the November 3 election as part of Initiative 645, a measure that seeks to repeal the tax. If the initiative succeeds, the projected revenues will be recorded as losses in fiscal statements. Governor Bob Ferguson, a supporter of the tax, oversees the agencies involved in the analysis but was reportedly not involved in the development of the document.