Washington state senators have approved a sweeping new tax proposal aimed at the state’s highest earners, marking a significant shift in a tax system long criticised as among the most regressive in the United States.

The measure, known as the Millionaires Tax, passed the Senate by a 27 to 22 vote and now moves to the House of Representatives for further consideration before the end of the sixty-day legislative session on March twelve.

Sponsored by Senate Majority Leader Jamie Pedersen, the bill would impose a 9.9 percent tax on personal income above one million dollars.

Households earning one million dollars or less would not be affected.

Lawmakers estimate that fewer than one percent of Washington households would pay the new levy.

Supporters say the proposal would generate approximately three point seven billion dollars annually.

Revenue would be directed toward public education, early learning and child care, health care services, and other core programmes.

A portion of the funds would also finance tax reductions intended to rebalance the state’s tax structure.

Among the targeted tax cuts are the elimination of sales tax on grooming and personal hygiene products, including items such as shampoo and deodorant.

Beginning in two thousand twenty-nine, small businesses with annual gross receipts under three hundred thousand dollars — representing roughly sixty-five percent of businesses in the state — would be exempt from the business and occupation tax.

Lawmakers describe the change as the largest small-business tax reduction in Washington’s history.

A business and occupation surcharge is also scheduled to be repealed in the same year.

The bill expands the Working Families Tax Credit, a sales tax rebate programme for low- and moderate-income households.

Additionally, seven percent of the new tax revenue would be distributed to counties to support public defense systems and strengthen public safety.

The measure also increases the charitable deduction exemption from fifty thousand dollars to one hundred thousand dollars.

An amendment adopted during Senate debate repeals recent expansions of sales tax to certain services, reducing costs for retail businesses.

Backers of the proposal argue that Washington’s tax structure places a disproportionate burden on lower-income residents.

Legislative data indicate that households in the lowest income quintile pay a significantly higher share of their income in state and local taxes than those in the top one percent.

Public polling cited by supporters suggests broad backing for a tax on high-income households, including majority support among Democrats, Independents and Republicans.

The Senate vote represents the most consequential step yet toward establishing a personal income-based tax in a state that has historically relied heavily on sales and business taxes.

The House is expected to take up the measure in the coming weeks as lawmakers race to conclude the session before the March deadline.