Washington State to Tax Millionaires; South Dakota Shields Wealth, Taxes Groceries

Amidst frustration over high property taxes and strained budgets, no one in Pierre this Session had the guts to propose taxing incomes.

Such was not the case in the state of Washington, where legislators and the Governor have shown a willingness to finally adopt a state income tax… on millionaires:

Lawmakers in Washington state this week approved a new income tax on residents making more than $1 million and could spur other states considering similar bills to approve their proposals.

Legislators in the Democrat-led Senate on Wednesday night approved the tax, which will impose a 9.9 percent tax on earners making over $1 million per year and will fund education, prisons, universal school lunches and replace or reduce other taxes, among other things, Democratic leaders said [Natalie Fertig, “Washington State Lawmakers Pass ‘Millionaire’s Tax’,” Politico, 2026.03.12].

A November 2025 poll found this 9.9% tax on income over $1M winning majority support from Washington Democrats, independents, and Republicans.

Washington has over 14 times as many million-dollar-making households as South Dakota. According to IRS data for the 2019 tax year, 15,890 Washington households reported income of a million dollars or more; only 1,100 South Dakota households reported the same financial success. But Washington’s FY2026 state general fund also appears to be just about 14 times South Dakota’s, so taxing million-dollar hauls in South Dakota might produce close to the same proportional fiscal impact as Washington will enjoy from its millionaire tax.

And if taxing our own millionaires’ income is still a bridge too far for South Dakota’s anti-income-tax legislators, we could always tax the millionaires from Washington and elsewhere who hide $814 billion in South Dakota trusts. A meager 0.1% parking fee on those trusts would produce $844 million, more than seven times the $114 million that South Dakota will raise from increasing the sales tax on groceries and other goods and pour mostly into the pockets of the people who own the fanciest houses in town. A millionaire tax could eliminate the need to raise sales tax next year and shift some of that wealth back down the ladder.

Washington lawmakers this year found the courage to enact a limited income tax on the wealthy. But it never occurred to any of South Dakota’s 105 legislators to discuss levying taxes where the wealth is. The South Dakota Legislature insists, Don’t touch those poor millionaires’ money! Tax the rich guys’ houses less, and tax bread and peanut butter more!