Washington Gov. Bob Ferguson said Friday he will sign legislation that would create a new 9.9% tax on household income above $1 million. Ferguson had raised concerns earlier in the week, but said amendments added tax credits and other measures he considers direct relief for families and small businesses.

The bill would apply to income over the $1 million threshold and state budget analysts project it would raise about $2.5 billion to $3 billion a year. Supporters say the revenue would fund programs including education and childcare, while opponents say the measure amounts to an income tax voters have historically rejected.

Ferguson said the updated bill directs a portion of the revenue back to households through expanded credits and other provisions. “Any bill I sign must send a significant percentage of that revenue back to Washington families and small business owners to make life more affordable,” he said, adding that the latest amendment met that standard.

Democratic lawmakers said the changes expand eligibility for the Working Families Tax Credit and add statewide free school meals. Republicans argued the legislation increases taxes and could lead to future expansion of an income tax base.

The bill’s sponsors said the tax would apply to a small share of filers and would not affect income below $1 million. Under the proposal, a household earning $1.2 million would pay the 9.9% rate on $200,000.

Republican leaders cited past ballot results where voters rejected statewide income tax proposals. Democrats said the measure would shift the state’s tax structure and provide funding for public programs.

The legislation still must pass both chambers before it reaches Ferguson for signature. Lawmakers are working under the deadline of the current legislative session, and Ferguson said he will review the final version if additional amendments are adopted.

Source: Gov. Ferguson says he’ll sign latest version of millionaire’s income tax proposal | KGW8