Group of House Democrats Finally Take A Stand Against The Half Billion Corporate Giveaway Within The Millionaires Tax

About a dozen representatives from the Washington State House Democratic Caucus signed on to a letter calling for the House Finance committee to pass the millionaires tax WITHOUT the corporate giveaway baked in. This marks a huge shift in the discourse surrounding the tax — Republican opponents, tepid supporter Bob Ferguson, and its Democrat sponsors in the Senate have hardly mentioned the half a billion dollar tax break for big business. The debate will lay bare who is a fighter for the working Washingtonian and who is more concerned with keeping wealthy donors happy, a very important distinction heading into the 2026 election where some politicos expect lefty populism to score with voters again.

The signatories include Reps. Shaun Scott (D-Seattle), Lisa Parshley (D-Olympian), Natasha Hill (D-Spokane), Brianna Thomas (D-Seattle), Julia Reed (D-Seattle), Nicole Macri (D-Seattle), Liz Berry (D-Seattle), Edwin Obras (D-SeaTac), Tarra Simmons (D-Bremerton), Beth Doglio (D-Olympia), Gerry Pollet (D-Seattle), Sharlett Mena (D-Tacoma), and Steve Bergquist (D-Renton). 

They described the millionaires tax, which would levy a 9.9% tax on income above $1 million a year, as a “major step in the direction of economic justice.” But they argued “[t]hat progress would be diminished by a big business handout embedded in the bill.”

The State Senate passed the millionaires tax with a token of their appreciation for big business tucked into the text. It would end a surcharge to the Business & Occupation tax on big business in 2028 instead of 2029. Sen. Jamie Pedersen (D-Seattle), the primary sponsor in the other chamber, has essentially admitted that he added that break to keep the powerful corporate lobby from dumping a bunch of money into a lobby effort or a campaign to kill the bill. In the three hours of debate over the bill in the Senate, not a single Democrat brought up the handout, let alone challenged the assumption that the State must appease big business to pass a policy that polling shows is very popular. 

This tax break will cost the State about $550 million. The Senate may be able to ignore that, but the handful of Democrats signed onto the letter can’t stomach that loss. The signatories noted that the proposed cuts to Washington’s K-12 schools add up to about $310 million and the cuts to childcare in Gov. Bob Ferguson’s supplementary budget rings in at about $225 million. While the State won’t feel the $550 million hit for a few years, it sets up even more of these devastating cuts in the future.

“These numbers don’t lie: the elimination of the corporate giveaway in [the millionaires tax] could help avoid budget reductions that would harm working families,” the letter read. 

The letter went on, “The purpose of a revenue bill is to raise revenue. The purpose of revenue is to fund programs people depend on. While major corporations can afford to pay state taxes because of the massive tax break they’ve received from Trump’s H.R. 1 budget, Washingtonians cannot afford to hand them half a billion dollars.”

The House will have a lot of requests to manage when it comes to amending and passing the millionaires tax. Ferguson laid out his conditions for signing the proposal into law, which includes routing about half of all revenue or almost $2 billion to sales tax relief. Ferguson and other Democrat critics see the tax as an opportunity to make Washington’s notoriously regressive tax code slightly less punishing for ordinary people. However, that further reduces available revenue to stave off future cuts to critical programs.

These fights and others should keep Washington representatives plenty busy for the last two weeks of session. The proposal faces its next hurdle, a vote by the House Finance Committee, on Friday.