This Opening Day seems like a pertinent time to discuss tax policy, as the Legislature made a major tax change that could impact Washington’s tax structure’s Wins Above Replacement.

Although taxes are not the only reason businesses and individuals choose to locate in a state, they are a factor. Some tax structures are more competitive than others. Last year the Tax Foundation ranked Washington’s tax competitiveness as the sixth worst in the country. This ranking reflected state tax systems in place on July 1, 2025, so it didn’t capture many of the tax increases that were adopted by the Legislature last year. (The effective dates for many of the changes weren’t until after July 1. The permanent business and occupation tax increase doesn’t go into effect until Jan. 1, 2027, for example.)

Legislators recognized this year that it is bad policy to have taxes with rates that are significantly higher than in other states and acted to repeal the estate tax rate increases that were adopted last year.

At the same time, however, the Legislature passed a new income tax with a 9.9% rate. In the Seattle Times, Senate Majority Leader Jamie Pedersen wrote, “This is not a radical idea — 41 states have a personal income tax, and in many of those states, the tax burden for individuals, particularly for those making more than a million dollars, is higher than 9.9%.”

It’s true that 41 other states have a personal income tax. But the 9.9% rate is high: Assuming other states’ top marginal income tax rates as of Jan. 1, 2026, Washington’s income tax rate would be tied with Oregon for fifth highest among the states. (Structural aspects other than rates also matter. For example, deductions and credits available in a state may counteract the effect of high rates.)

Moreover, the impact of Washington’s new income tax on our economy can’t be considered in isolation. It will be added on top of an existing tax structure that is already one of the country’s least competitive.

The Tax Foundation argues that we should think about tax competitiveness like the baseball statistic Wins Above Replacement. (I’ve written about this delightful framing before, including here.) From the 2026 State Tax Competitiveness Index:

Tax competition is a little like WAR—not conflict, but Wins Above Replacement. The term comes from baseball, where it is intended as a sabermetric statistic to measure how many more wins a team can claim due to a specific player above the amount that would be generated by a replacement-level player. It’s much the same way in public finance: a well-structured tax code won’t make the Wyoming Basin a metropolis, nor will poor tax structure make Manhattan a ghost town. But tax structure does play a role in a state’s economic successes or failures, and often a substantial one. Every state can benefit from a simple, neutral, transparent, pro-growth tax structure.