Report: WA Income Tax Will Shrink State Economy & Lead To Business Exodus

Washington state's 9.9% millionaire income tax could cost the economy up to $2.50 in lost economic output for every $1 in tax revenue collected, according to a new study from the Washington Policy Center and Buckeye Institute. The findings come as Washington voters prepare to decide the future of the state's income tax through Initiative 645 on the November 3, 2026 ballot. The study warns that Washington's income tax could reduce economic growth, business investment and job opportunities as businesses and high-income earners respond to higher taxes. Washington Policy Center Tax and Budget Policy Director Ryan Frost joins Washington In Focus Daily to explain the findings and discuss whether the millionaire income tax could accelerate wealth migration and business departures from Washington state. Under the current law, income exceeding $1 million is subject to a 9.9% state income tax. Critics warn that future lawmakers could eventually lower that threshold, expanding the tax to additional Washington residents. Supporters of the income tax argue that the revenue is needed to support education, health care and other state priorities. The campaign opposing Initiative 645 claims that repealing the tax would eliminate approximately $13 billion in projected state revenue. Frost challenges that argument, noting that the revenue projections cover future budget years and that Washington already funds education and health care through existing revenue sources. With Initiative 645 appearing on the November ballot, Washington voters face competing claims about the income tax's impact on jobs, economic growth, taxpayer spending and state government funding. In this Washington In Focus Daily report: New Washington Policy Center and Buckeye Institute income tax study Estimated $2.50 in lost economic output per $1 in income tax revenue Washington's 9.9% millionaire income tax explained Initiative 645 and the November 3 repeal vote Potential job losses, wealth migration and business departures Debate over $13 billion in projected state tax revenue Education, health care and Washington state budget priorities Ryan Frost's analysis of the economic consequences Watch Washington In Focus Daily for reporting on Washington taxes, state government, taxpayer spending, business climate and economic policy. Subscribe to The Center Square for independent journalism covering the decisions affecting Washington residents and taxpayers. #WashingtonIncomeTax #Initiative645 #WashingtonState #MillionaireTax #TaxPolicy #WashingtonEconomy #TaxpayerAccountability #WashingtonPolitics #WashingtonInFocus