Leslie Lewallen, director of Future 42 Clark County, led a coalition of local business owners with a letter speaking out against the Washington Legislature’s recently passed “millionaire’s tax” before it was passed last week.
Future 42 is the grassroots communications arm of Project 42, a Washington nonprofit focused on advancing policies centered on free markets, personal liberty and economic opportunity. The organization launched a Clark County chapter in June 2025, with Lewallen as director, joining existing efforts in Whatcom and Snohomish counties as Future 42.
The local chapter monitors government activity, issues legislative and local scorecards, recruits candidates and advocates for what it describes as transparent and taxpayer-focused policies, Lewallen explained.
The letter was signed by over 30 Clark County businesses on Monday, March 9, warning that the income tax policy could have significant consequences for businesses, investment and long-term economic growth in Southwest Washington and across the state.
“For many small business owners, income from operations passes directly through to our
personal tax returns,” the letter reads. “This means SB 6346 would effectively impose a steep new tax on business earnings, even when those funds are reinvested in growth, equipment or employee wages rather than taken as personal profit. In Clark County, where industries like manufacturing, retail and services rely on slim margins, this additional 9.9% burden — among the highest tax rates in the nation — could force us to cut jobs, reduce hours or delay expansions. S-corps and LLCs, which represent over 85% of small businesses in our state, would be hit hardest, as the $1 million threshold fails to account for the realities of business cash flow and reinvestment needs.”
North Clark County businesses such as Wolf Industries, Maddox Industrial Transformer, Al and Ernie’s, Battle Ground Hospitality Collective, Galeotti’s Wine Cellar, Tapani Inc. and others signed the March 9 letter to the state Legislature.
Despite massive opposition, lawmakers passed the 9.9% tax on personal income above $1 million per year.
The bill creates the first income tax in state history. Washington was one of only nine states without an income tax. In 1932, Washington voters approved an income tax but the state Supreme Court in 1933 struck down the effort as income is classified as property under the state constitution. Other times, voters had turned down income tax proposals.
Public engagement surrounding the proposal has been significant. During legislative hearings, tens of thousands of people registered opposition to the bill through the state’s public comment system, reflecting widespread interest in the debate over the state’s tax structure and economic direction, Lewallen said.
The legislation would take effect on Jan. 1, 2028, with tax payments due in 2029.
For the policy to go before voters, opponents will need to gather more than 300,000 signatures for a ballot initiative, double what’s needed for a referendum, The Washington State Standard recently reported.
The recent debate comes after lawmakers approved a tax proposal targeting the state’s highest earners. Supporters argue the measure would help fund public programs and provide financial relief to working families and small businesses. Critics, however, contend the policy represents a broader state income tax that could eventually expand beyond its original scope.
“First, I mean, the tax is unconstitutional,” Lewallen said. “If the Democrats wanted to go about this in the correct manner, they would have amended the state constitution. They did not do that. They tried to sidestep our constitution and they also tried to sidestep the will of the voters who, when given the opportunity to weigh in on this issue, have voted down an income tax 10 separate times.”
On Thursday, March 12, Let’s Go Washington — a political action committee that sponsors citizen-led initiatives to the Washington state Legislature — stated that “thousands of Let’s Go Washington supporters are trying to understand what many are calling one of the most dismissive legislative sessions in recent memory.”
Opponents of the proposal argue the tax could accelerate a trend they say has already begun in Washington — companies relocating operations or considering moves to other states.
One example frequently cited in the debate occurred in 2021 when the state enacted its capital gains tax. Soon after the law passed, Fisher Investments moved a portion of its operations to Texas, Lewallen said. Lewallen added that such decisions have ripple effects that reach far beyond individual companies, influencing employment, economic development and the overall tax base in communities across the state.
According to Lewallen, Clark County could feel those effects even harder if more businesses choose to relocate or shift operations.
“I think this unfortunate, unconstitutional, income tax is the direct result of 40 years of one party rule,” Lewallen said. “Our founding fathers envisioned three branches of government for proper checks and balances, and we don’t have that in Washington state anymore.”
Local leaders in Clark County and its cities have spent years planning for population growth and working to expand the regional tax base. Lewallen said an income tax could discourage investment and complicate those plans, potentially creating budget shortfalls for local governments and increasing the burden on remaining taxpayers.
Supporters of the legislation have framed the proposal as a targeted tax affecting only a small share of Washington residents.
“The millionaires tax passed by the House represents historic progress in rebalancing our unfair system,” Gov. Bob Ferguson stated on Tuesday, March 10. “... The millionaire's tax will apply to less than one half of one percent of Washingtonians, but make life more affordable for millions. I look forward to signing it.”
Despite those arguments, critics say the measure adds to what they describe as an increasingly difficult business climate in Washington. The state already faces some of the nation’s highest gas prices and a rising cost of living, while business owners also contend with regulatory requirements and development fees that can make starting a small business expensive.
Recently, entrepreneurs have pointed to high traffic impact fees and permitting costs as examples of barriers that can make launching a business difficult. In some cases, the costs of permits, fees and infrastructure requirements can total hundreds of thousands of dollars before construction even begins.
Lewallen added that new taxes layered on top of those expenses could discourage entrepreneurs from opening or expanding businesses in the state. She also raised concerns that owners of small businesses structured as pass-through entities — such as LLCs or S-corporations — often rely on personal income to reinvest in their companies. A new tax on high earners, they say, could limit those reinvestment opportunities.
“We’re driving out innovation,” Lewallen said. “We’re driving out good people. We’re driving out investment.”
