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Ballot Measure Summary
This measure would repeal a 9.9% tax on annual individual income over $1,000,000; prohibit state and local governments from imposing taxes on individual income or the receipt of individual income and taxes measured by an individual’s income; and define income as “any gain or benefit measured in money derived from an individual’s capital, labor, property, or other source.” It would also define “individual” as a natural person for purposes of excise taxes.
Why do we need this initiative?
The income tax is not just a tax on “the rich”; it is a legal test case designed to open the door to a broader statewide income tax. Senator Jamie Pedersen communicated openly with the Attorney General’s Office about how to get the Washington Supreme Court to reconsider longstanding income-tax precedent, and sidestep voters to pass his unconstitutional tax.
• Legislators refused to put guardrails in the income tax to prevent the threshold from dropping lower than on people who earn $1 million, that means this is a tax that is coming for all Washingtonians.
• The tax is imposed on individuals, not on the largest and wealthiest corporations, meaning many of the richest corporate entities are left untouched while individuals, pass-through business owners, entrepreneurs, and households with one-time income events are targeted.
• The tax has already accelerated capital flight by encouraging high earners, founders, investors, and retirees to relocate before the tax begins in 2028.
What Does it do?
IP26-645 Repeals Bob Ferguson’s unconstitutional 9.9% tax on annual individual income over $1,000,000; prohibits taxes measured by individual income and taxes on individual income or the receipt of individual income; and defines “income.”
• Protects businesses, individuals, entrepreneurs and families in the state who shouldn’t be unfairly taxed.
• Requires Olympia to fund the expansion of the Working Families Tax Credit, preserving tax relief for eligible low- and moderate-income working families.
• Protects future exemptions for household necessities such as grooming and hygiene products, diapers, and over-the-counter drugs.
• Provides small-business B&O relief, including the increased small-business tax credit and higher filing-relief threshold.
• Leaves in place the bill’s future rollback of sales tax on certain services, including provisions tied to retail-sale definitions and technical corrections for services newly subject to sales tax.