By Andy Giegerich
Sussman Shank Managing Partner and Tax Group Chair, Heather A. Kmetz, was featured in an opinion published by the Portland Business Journal. In it, Kmetz opines why the newly signed Washington “Millionaires Tax” (SB 6346), which imposes a 9.9% tax on earned income over $1 million, is unlikely to send wealthy Washingtonians to Oregon.
I’d been hearing talk of the so-called “Millionaires Tax” landing in Washington fora while. When Washington Gov. Bob Ferguson signed it into law this week, it struck me that this could be good for Oregon.
Faced with a new income tax, I reasoned, those wealthier denizens who might be tempted to move from Multnomah County, home of the country’s highest individual tax burden (per Wallet Hub) might hesitate, lest they face new levies on their income.
For some reason, it seemed like a plausible theory. After all, Starbucks Howard Schultz left Washington last month after 40 years. He didn’t move to Oregon, but maybe, all things being more equal between the two states, we could attract a few additional folks who might fortify our municipalities’ general funds.
Shows what I know.
Before getting into why my theory ends up being flawed, here’s a bit about the Millionaires Tax. It places a a 9.9% tax on income over $1 million to fund education, universal school lunches and prisons. Supporters say it also provides tax relief to some small businesses.
Washington is one of eight states in the U.S. without an income tax, which, as I noted above, tends to attract those Portlanders looking to escape our own high rates.
We’ll likely be covering it some more, but for the time being, I called an expert to see if my theory about the tax helping Oregon held water. No, Heather Kmetz, the tax attorney who’s also managing partner of Portland’s Sussman Shank LLP law firm, politely shared.
Washington’s number on income over $1 million “very magically matches Oregon’s 9.9%” top income tax rate, Kmetz said. “As does Washington’s capital gains tax, which levies 9.9% on all capital gains over $1 million.”
The thing is, those moving out of Oregon to Washington weren’t necessarily looking to avoid our own 9.9% figure.
“They’re actually trying to avoid the local taxes,” Kmetz explained, such as Preschool for All, which levies 3% on married joint income over $400,000.
What’s more, that tax is slated to increase by another 0.8% in 2027. We also have the supportive housing tax, which affects households with married joint income over $200,000 and businesses with gross receipts over $5 million at a 1% clip.
“That is not an insignificant amount of annual taxes,” Kmetz said. “This change to Washington law doesn’t mean wealthy people will now move to Oregon. They will move to one of the eight states with no income taxes, because wealthy people can take up residency anywhere they want and still travel to wherever they want to spend time.”
Kmetz gave several other reasons as to why my theories didn’t work, but I only have about 450 words in this space. So I’ll just say that while Oregon definitely has a lot of things going for it, our ability to appeal to would-be residents whose higher incomes might enhance our general fund isn’t one of them.
Link to the article in the Portland Business Journal here: https://www.bizjournals.com/portland/news/2026/04/01/millionaires-tax-oregon-washington.html
