Washington voters have decisively rejected the repeal of the state's new millionaires tax, while Tuesday's Democratic wave put a state House supermajority within reach and voters in most counties approved a ban on transgender girls in girls' school sports.
More than two million ballots had been counted, with hundreds of thousands still to come, and the repeal initiative was trailing 58% to 42% in election-night returns. King County rejected it by an even wider margin, with 66.5% voting no, and the Seattle Times estimated the measure would need about 62% of the remaining ballots to pass.
The tax applies a 9.9% rate to household income above $1 million and was signed into law in March by Gov. Bob Ferguson alongside tax breaks for small businesses and lower-income families. It takes effect on 2028 income, with first payments due in April 2029, and the state projects it will raise $3 billion to $4 billion a year from roughly 25,000 households. Voters had been asked numerous times over the past century to allow an income tax and refused each time.
The tax has divided Seattle's tech community. Madrona, the venture capital firm, gave $250,000 to the repeal campaign, and managing director Matt McIlwain said the outcome should be disappointing for all Washingtonians because having no income tax had been a major source of competitive advantage. “I am concerned for the future ability of Washington state to be competitive,” he wrote.
Ben Golden, an attorney and advisor to Pacific Northwest startups and investors, countered that the result demonstrates "that Washingtonians are ready to invest in ourselves," and that the state will be ready for the wave of Medicaid cuts and AI job disruption on the horizon. Brian Fioca, a Seattle-based serial entrepreneur and investor, said he hoped the revenue would improve quality of life: "If someone decides not to start a business here, or chooses to leave because of this tax, that's not someone I'd be particularly excited to work with or invest in anyway."
State Sen. Jamie Pedersen, the measure's architect and Senate majority leader, celebrated at the No on 645 campaign's election-night event in Seattle: "We have been saddled with an anchor around our neck, with a tax system that is bad for working people, that's bad for small businesses, that's bad for just about everybody except for the one percent."
The tax result came inside a wider blue wave. Republicans could lose at least 13 of the seats they now hold in the state House depending on final counts, a third of their caucus, which would give Democrats a supermajority able to pass bonds, override a governor's vetoes and advance constitutional amendments without Republican votes. "This is a low point for the Republican party," GOP campaign consultant Alex Hays said.
The wave carried Democratic US Rep. Marie Gluesenkamp Perez to an unexpectedly easy win over state Senate Republican Leader John Braun, with 55% of the vote, and threatened Republican US Rep. Michael Baumgartner in the reliably Republican 5th District, where he led Democratic challenger Carmela Conroy by a single percentage point after beating her by 21 points two years ago.
Initiative 638, which bars transgender girls from girls' school sports, cut across those partisan currents: it passed in 36 of 39 counties, failing only in King, Jefferson and San Juan. In King County, tens of thousands of voters who preserved the millionaires tax also backed the ban, and in Clark County 61% voted for Gluesenkamp Perez while 60% voted for the ban. A legal challenge is expected.
The state Supreme Court is expected to be called on to decide the tax's constitutionality. Voters filled five of nine seats. Four candidates backed by Democratic forces were leading, while appeals court Judge Ian Birk trailed King County Superior Court Judge Sean O'Donnell in a race that could take days to decide. A lawsuit filed in April by former Attorney General Rob McKenna and former state Supreme Court Justice Phil Talmadge argues the tax is unconstitutional, citing a 1933 ruling that classified income as property.
Brian Heywood, the hedge fund manager behind Let's Go Washington, has invested millions of dollars into the effort and showed no sign of winding down after losing the tax fight and winning the sports ban. Five of the group's 10 initiatives have become law, though lawmakers later neutered two and courts tossed another. “We've tried to give a voice to those who feel like Olympia stomped on them, won't listen to them, and they're up against the machine,” he told supporters. “We built an infrastructure that I think can do something that is meaningful in this state and should give people a reason not to give up.”
Analysis
Why This Matters
- Washington has been among the nine states without an income tax, a status tech leaders have long touted as an edge in recruiting companies and talent; the vote tests whether voters still prize that distinction.
- The state projects the tax will raise $3 billion to $4 billion a year from roughly 25,000 households, revenue supporters say is needed for the wave of Medicaid cuts and AI job disruption on the horizon.
- The result sets up a state Supreme Court fight over the tax's constitutionality, with the court's membership reshaped by five races on Tuesday's ballot.
Background
Washington has long stood among the nine US states without a personal income tax, a distinction tech leaders cited as a competitive advantage. Voters had refused to allow an income tax in repeated attempts over the past century before the 9.9% millionaires tax became law in March. Tuesday's ballot carried the repeal attempt, backed by the conservative political committee Let's Go Washington, founded by hedge fund manager Brian Heywood, alongside the committee's initiative to ban transgender girls from girls' school sports.
Key Perspectives
- Matt McIlwain, Madrona managing director (opposed the tax): says the outcome should be disappointing for all Washingtonians and that he is concerned for the state's future competitiveness.
- Ben Golden, attorney and Pacific Northwest startup advisor (supported the tax): says Washingtonians are ready to invest in themselves and the state will be ready for Medicaid cuts and AI job disruption.
- Brian Fioca, Seattle entrepreneur and investor (supported the tax): says someone who would leave or refuse to start a business because of the tax is not someone he would want to work with or invest in anyway.
- State Sen. Jamie Pedersen, tax architect: says the old tax system was bad for working people, small businesses and just about everybody except the one percent.
- Alex Hays, GOP campaign consultant: calls the results a low point for the Republican party.
- Brian Heywood, Let's Go Washington founder: says the group built infrastructure that can do something meaningful in the state and should give people a reason not to give up.
What to Watch
- Final counts in the coming days: whether the repeal margin holds and whether Democrats confirm a supermajority in the state House.
- The state Supreme Court's ruling on the tax's constitutionality, with the unresolved race between Ian Birk and Sean O'Donnell leaving the court's final makeup open.
- A legal challenge to Initiative 638, which the Standard expects.
Checked
12 claims in this story checked against 2 sources: 11 supported.
Show each claim
- SupportedThe headline says Washington appears to have kept the millionaires tax.GeekWire: “Washington voters appear to have upheld the state’s new tax on high earners”
- SupportedThe headline says the Democratic wave has put a state House supermajority within reach.Washington State Standard: “A likely supermajority in the state House.”
- SupportedThe repeal initiative was trailing 58% to 42% in election-night returns.GeekWire: “Initiative 645, which would repeal the 9.9% tax on household income above $1 million, was trailing 58% to 42% in election-night returns.”
- SupportedThe sports ban passed in 36 of 39 counties.Washington State Standard: “It passed in 36 of 39 counties.”
- Partly supportedThe opening says Washington voters have decisively rejected the repeal initiative.GeekWire: “Initiative 645, which would repeal the 9.9% tax on household income above $1 million, was trailing 58% to 42% in election-night returns.”
- SupportedMatt McIlwain said the outcome should be disappointing for all Washingtonians because having no income tax had been a major competitive advantage.GeekWire: ““The outcome on the income tax should be disappointing for all Washingtonians as having no income tax was a major source of competitive advantage for the state,” said Matt McIlwain”
- SupportedMatt McIlwain said, “I am concerned for the future ability of Washington state to be competitive.”GeekWire: ““I am concerned for the future ability of Washington state to be competitive,” he wrote.”
- SupportedBen Golden said the election outcome demonstrates “that Washingtonians are ready to invest in ourselves.”GeekWire: “Ben Golden, an attorney and advisor to Pacific Northwest startups and investors, countered that the election outcome demonstrates “that Washingtonians are ready to invest in ourselves.””
- SupportedBrian Fioca said, “If someone decides not to start a business here, or chooses to leave because of this tax, that’s not someone I’d be particularly excited to work with or invest in anyway.”GeekWire: ““If someone decides not to start a business here, or chooses to leave because of this tax, that’s not someone I’d be particularly excited to work with or invest in anyway.””
- SupportedJamie Pedersen said, “We have been saddled with an anchor around our neck, with a tax system that is bad for working people, that’s bad for small businesses, that’s bad for just about everybody except for the one percent.”GeekWire: ““We have been saddled with an anchor around our neck, with a tax system that is bad for working people, that’s bad for small businesses, that’s bad for just about everybody except for the one percent,” he said”
- SupportedAlex Hays said, “This is a low point for the Republican party.”Washington State Standard: ““This is a low point for the Republican party,” GOP campaign consultant Alex Hays said.”
- SupportedBrian Heywood told supporters, “We’ve tried to give a voice to those who feel like Olympia stomped on them, won’t listen to them, and they’re up against the machine,” and, “We built an infrastructure that I think can do something that is meaningful in this state and should give people a reason not to give up.”Washington State Standard: ““We’ve tried to give a voice to those who feel like Olympia stomped on them, won’t listen to them, and they’re up against the machine,” he said. “We built an infrastructure that I think can do something that is meaningful in this state and should give people a reason not to give up.””