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Washington Lawmaker Proposes 5% Payroll Tax on Wages Above $125,000

Backers say the revenue would cushion state services from Trump’s H.R. 1 tax package.

Overview

  • At an Olympia news conference, Rep. Shaun Scott unveiled the Well Washington Fund and stood with SEIU 775, the Washington Federation of State Employees, and housing advocates.
  • The draft would impose a 5% excise on payroll amounts above $125,000 at large private employers, with thresholds reported at more than 50 workers, payroll over $7 million, and gross receipts above $5 million.
  • Scott estimates the measure would raise more than $2 billion a year for housing, health care and higher education, with reporting noting potential exemptions for large health care and social service providers.
  • Business groups and Republican lawmakers argue the plan would make Washington less competitive and could push jobs elsewhere, citing Seattle’s JumpStart experience.
  • The bill is expected to be filed for the 2026 session, Scott said he may explore an emergency clause, and, if enacted, the tax would begin July 1, 2026.