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Faced with a multi-billion-dollar budget shortfall over the next four years, outgoing Washington Governor Jay Inslee is proposing a new “wealth tax.”

His proposed budget includes a 1% annual tax on wealth above $100 million, as laid out in from Inslee Tuesday. Inslee said that would generate about $10 billion over four years and affect about 3,400 residents.

During a press conference in Olympia Tuesday, the governor said this is about fairness.

“There’s no enemies in this drama,” he shared. “There’s no bad guys in this drama but there is a need in our state for basic fairness, for increased equity and reduction of massive poverty that we are unfortunately experiencing in this particular economy.”

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Inslee then went into further detail about his proposed tax.

“This wealth tax would put a modest 1% tax on the wealth of residents that exceeds $100 million so this tax would only be on the excess over $100 million,” he explained.

, citing the Tax Foundation, a conservative-leaning policy organization, no other states — and only a few countries — have taxes structured the way Inslee is proposing.

Inslee also wants to raise taxes on businesses. His proposed would hit about 20,000 companies with an annual income of more than $1 million. It includes a temporary 20% tax hike for the first year followed by a 10% increase starting in 2027.

“It would be on companies with annual income exceeding $1 million in certain tax categories,” he explained. “This is written in a way that the majority of businesses would not be impacted.”

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Washington, which does not have an income tax, is considered to have one of the most regressive tax systems in the country, meaning lower-income residents pay a larger share than richer ones, according to the AP.

The notion was confirmed in a chart in Inslee’s Medium post, from the Institute on Taxation and Economic Policy’s 2024 “Who Pays?” Report. The chart shows families who make less than $33,500 see 13.8% of their income go to taxes, while families who make over $878,400 only see 4.1% of their income go to taxes.

Inslee’s spending plan also includes about $2 billion in cuts and savings. However, his 2025-2027 budget also includes $905 million for 5,000 additional affordable housing units and homelessness services, along with $7 million for 60 additional state law enforcement officers.

The AP reported Governor-elect Bob Ferguson recently told he would not rule out tax increases to cover the budget shortfall.

Contributing: Aaron Granillo, ³ÉÈËXÕ¾ Newsradio; Julia Dallas, MyNorthwest; The Associated Press