Olympia, WASH. — Governor Bob Ferguson is proposing a ‘sales tax holiday’ if the so-called ‘millionaires’ tax’ passes this legislative session.
Gov. Ferguson says 18 states already do this and he wants to have two of them: one three-day weekend a year and one two-day ‘holiday’ for items under $1,000. He estimates that would put $141 million back in the pockets of families every year.
While talking about the millionaires’ tax bill that passed the senate and is now heading to the house, he also proposes certain items exempting from sales tax like diapers and baby products.
Ferguson wanted to clarify, that people would be taxed on everything they make over $1 million. So, if you make $1.2 million per year, you’d be taxed 9.9% on the $200,000.
The tax would not apply to retirement savings or the value of your home.
The Governor also said he is crystal clear, that he would not support an income tax for people making under $1 million a year. He also said that the $1 million threshold should go up with inflation.
Ferguson laid out what needs to be in the bill for him to sign it.
“We are not there yet, and we are not close to being there…this bill must be laser focused on making life more affordable for Washingtonians, and continuing to improve areas like K-12 education.”
He proposed the largest chunk of revenue from the credit to expand the Washington Working Families tax credit. It would use about $2 billion of the projected $3 billion in revenue from the tax. The state would expand how many families qualify and increase the amount they would receive. He said 460,000 more households would qualify under his proposal.
He also proposed using $1 billion of the revenue from the millionaires’ tax to give small business owners a significant tax break. He said it would essentially eliminate the B & O tax on the first $2.5 million in total revenue for that business. He estimates 170,000 small businesses would no longer need to pay that tax.
Critics have argued the proposed tax would drive millionaires out of the state, and they fear this could lead to a personal income tax for everyone in the years ahead.
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