As voters prepare for the upcoming November election, Initiative Measure No. 645 presents a clear choice for Washington state's economic future. To protect the competitive edge of the Inland Northwest business community, citizens should vote 'yes' to prohibit state individual income taxes.

Enacted by the Legislature under ESSB 6346 in 2026, the underlying law established a 9.9% tax on individual annual income exceeding $1 million, scheduled to take effect in 2028. If approved by voters, Initiative 645 would repeal this 9.9% income tax before collections ever begin and would permanently prohibit state and local governments from enacting taxes measured by individual income.

For employers throughout Eastern Washington and statewide, supporting Initiative 645 is a step toward protecting Washington's business climate. 

Association of Washington Business President Kris Johnson notes that Washington is already a high-cost environment for families and job creators. Operating without a state individual income tax has long served as one of the state's primary competitive advantages when attracting new investment and talent against other states. 

Crucially, the threat of an individual income tax extends well beyond multimillionaires. A major portion of Washington’s small- and medium-sized companies — including regional manufacturers, service providers, and family-owned firms — are legally structured as S corporations, partnerships, LLCs, or pass-through entities. Under these business structures, commercial profits flow directly onto the business owners' personal income tax returns. 

Consequently, an individual income tax directly shrinks net operating margins, leaving local business owners with significantly fewer resources for capital expansion, equipment upgrades, payroll growth, and employee benefit packages.

Proponents of the measure also note that Washington voters have rejected income tax proposals 10 times over the last 90 years, recognizing the danger of unchecked fiscal expansion. While opponents frame the 9.9% tax as a narrow levy, lawmakers previously rejected attempts to permanently lock in its standard deduction, leaving open the possibility that future legislatures could lower thresholds to tax broader working families. 

Furthermore, state revenue forecasts show that overall revenue collections continue to expand from one biennium to the next even without the income tax. Recent state fiscal shortfalls appear to stem from legislative spending growing faster than ongoing revenues, rather than a lack of tax receipts.

Opponents caution that Initiative 645 would result in an estimated state revenue loss of $11.4 billion over five state fiscal years — from 2027 to 2031 — which would otherwise support public K-12 education, higher education, and healthcare programs. However, Initiative 645 specifically targets the repeal of the income tax while preserving key tax relief provisions enacted under ESSB 6346 — including the expanded small-business business and occupation tax credit, sales tax exemptions for essential items, and expanded eligibility for the Working Families Tax Credit.

We've noted many times in this space that our state government doesn't have a revenue problem; it has a spending problem. The focus should be on operating within existing revenue growth, not imposing an income tax.