OLYMPIA, Wash. — — For two hours Friday, legislative budget writers got an earful from opponents and praise from supporters of a proposed income tax aimed at the state's wealthiest residents.

The proposal, dubbed a millionaires tax" by Democrats who unveiled it this week, would apply the 9.9% tax on incomes of above $1 million a year.

At a packed Senate Ways and Means Committee hearing, opponents criticized Senate Bill 6346 as a misguided and illegal tax grab that would inevitably creep down to include more than just millionaires.

But supporters argued the proposal is a long overdue remedy to a state tax system that infamously saddles lower-income workers with a relatively high tax burden, while letting the very wealthy off lightly.

Opponents rallied massive online opposition to the bill, with more than 60,000 signing up on the legislative website urging lawmakers to reject it, far outpacing those who registered support.

Redmond hedge fund manager Brian Heywood, who has bankrolled several anti-tax initiatives, told lawmakers he'd be affected by the tax, but "like many people in my position, I have got options," saying he can maneuver to avoid it.

Heywood said he's heard from 50 couples in the past two weeks who have left the state or are planning to because of recent tax increases passed by majority Democrats.

Anti-tax activist Tim Eyman called the proposal the "jealousy bill" because it's driven by people who resent the rich. He compared Democrats to "terrorists" who are counting on a "corrupt court system" to back them up.

Washington is one of nine states that do not levy a personal income tax, and voters here have repeatedly rejected proposals to impose one, most recently in 2010.

Supporters of the new tax plan are betting that sentiment has changed, pointing to recent polling and an overwhelming vote in 2024 to maintain the state's new capital gains tax on wealthy investors.

They also noted actions by President Donald Trump and the Republican-led Congress, which have delivered massive tax breaks to rich people and corporations, while slashing health care and other services.

A couple of millionaires testified in support of the proposal, saying they look forward to paying the tax.

Jed Fowler, who owns a fourth-generation construction-supply business, said fixing an "upside down" tax code will fund services that benefit businesses by making sure the broader community is thriving.

"It's better to grow the pie than to fight about slicing it," he said.

Melissa Dingmon, with the advocacy group Moms Rising, said the high-earners tax is a long-term solution to preserve important services, such as Medicaid benefits that saved her infant son's life after a cancer diagnosis.

"Families like mine are struggling to pay for lifegiving care ... while the rich get richer," Dingmon said.

SB 6346 would impose a 9.9% tax on income exceeding $1 million starting in 2028, with the first taxes due in 2029. That would bring in about $3.5 billion a year from an estimated 30,000 taxpayers, according to a legislative staff analysis.

Most of the proceeds would flow to the state general fund, which pays for K-12 schools and other state services.

The tax would be owed on just the amount above the $1 million threshold, so someone making $1.3 million, for example, would pay the tax on $300,000 of their income.

As opponents noted, the bill also includes a so-called "marriage penalty," so married couples would owe the tax on their combined incomes of more than $1 million.

People could also claim a $50,000 exemption for charitable contributions.

Gov. Bob Ferguson has endorsed the tax, but said this week he wants to see changes in the bill to include more tax breaks for businesses and individuals in exchange for the new levy on high-earners.

The bill would raise the state business and occupation tax threshold so businesses grossing less than $250,000 a year would not have to pay the tax, up from $125,000 now. Ferguson says he wants that exemption expanded to $1 million a year.

Even if it passes, the bill is sure to face legal challenges. A 1933 state Supreme Court ruling struck down a voter-approved graduated income tax as unconstitutional — a precedent that Democrats want the court to revisit.

The bill also contains a clause blocking a public referendum vote by declaring the measure "necessary for the support of the state government and its existing public institutions."

Opponents can still put the tax before voters through an initiative, which requires twice as many signatures to get on the ballot.

The public hearing Friday was scheduled only a few days after the text of the 63-page tax bill was made public.

To push it ahead Friday, Democrats moved to waive a rule that normally requires five days' notice before a public hearing on a bill.

Republicans objected, with state Sen. Chris Gildon criticizing majority Democrats for the short notice on "the most consequential piece of tax legislation this century."

Democrats overrode the GOP objection on a party-line vote.

Gildon also sought to pin Democrats down on whether there was any guarantee in the "millionaires tax" that it would not be expanded in the future to lower-income taxpayers.

Senate Majority Leader Jamie Pedersen, a Democrat and the chief sponsor of the proposal, said the bill "in front of us" only affects people making more than $1 million.

But he noted lawmakers cannot "bind" future Legislatures from making changes.

"We all want to make sure that our successors will have the flexibility to respond to the challenges that they see in front of them, Pedersen said.

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