Washington lawmakers have approved new tax policies that include a levy on the state’s highest earners alongside an expanded Working Families Tax Credit, a move supporters say will make the state’s tax structure more equitable.

The legislation introduces what is widely described as a “millionaires’ tax,” targeting individuals with very high levels of investment income.

At the same time, lawmakers voted to broaden the Working Families Tax Credit, a program designed to provide financial relief to lower- and moderate-income households.

Supporters of the policy argue that Washington’s tax system has long relied heavily on consumption taxes, which can place a proportionally larger burden on lower-income residents.

By increasing taxes on the wealthiest individuals while expanding credits for working families, advocates say the state is taking steps to rebalance the system and reduce inequality.

The expanded credit will allow more residents to qualify for payments intended to offset the cost of living.

The program provides refunds to eligible households and is modeled partly on the federal earned income tax credit, which supports workers with modest incomes.

Lawmakers backing the measure said the combined policies are designed to strengthen economic stability for families while ensuring the state has the resources needed to fund public services such as education and community programs.

Critics have raised concerns that higher taxes on wealthy residents could encourage some individuals or businesses to relocate to states with lower tax burdens.

Opponents argue that such moves could affect long-term revenue projections and economic competitiveness.

Supporters of the legislation counter that Washington’s strong economy, thriving technology sector and quality of life make the state an attractive place to live and work even with higher taxes on top earners.

The measures now move toward implementation as state agencies prepare administrative guidelines and systems needed to apply the new tax structure and distribute expanded credits to eligible households.