(The Center Square) – Downtown Seattle Association President & CEO Jon Scholes said Wednesday night that the Emerald City’s downtown area has lost 37,000 jobs in the last five years with city business taxes causing the losses.
“We’re going in the wrong direction,” he told a crowd assembled for the State of Downtown annual program at the Seattle Convention Center.
At the same time, he said, downtown Bellevue has seen a 12% job increase, including some jobs that have moved from Seattle.
“And over the same period where we’ve seen a decrease in jobs, we’ve seen a record increase in taxes that employers in the city of Seattle are paying that employers aren’t paying in Bellevue and other cities in our region,” he said.
In 2003, the Seattle City Council approved an increase to the city’s payroll expense tax to 6.5% for companies whose employees make more than $150,000. That’s in addition to a business and occupation tax that Seattle businesses pay on top of the state B&O tax.
And then there’s Seattle’s Social Housing Tax is indeed being collected for the first time this year. Approved by voters in February 2025, this measure imposes a 5% payroll tax on individual employee compensation exceeding $1 million to fund the city’s social housing developer.
Seattle Mayor Katie Wilson spoke earlier in the program, saying she understand businesses concerns that taxes in Seattle are higher than in nearby communities.
“I very much appreciate that it is not ideal for our tax environment, for businesses to be wildly out of step with neighboring jurisdictions,” Wilson said to a loud applause.
Wilson said later in her speech that, “as a progressive and a socialist,” she believed it was important for people to have trust in their government.
She also alluded to pending budget cuts for 2027 with the city of Seattle facing a budget deficit of up to $140 million.
“We can’t be afraid to stop funding things that aren’t working well,” she said without offering details of specific reductions her administration was considering.
Scholes, after the program was over, said he was concerned about the “millionaire’s tax” – that is, Senate Bill 6346, proposing a 9.9% tax on annual income over $1 million for individuals or households. SB 6346 has cleared the full Legislature and now heads to Gov. Bob Ferguson’s desk for his expected signature.
“I think with all these new taxes that makes us an outlier, there’s a concern,” Scholes said.
He said businesses have been made out “to be villains” and taxes are being enacted before its even known how the money will be spent.
Scholes said that tech companies that have recently expanded operations in Bellevue, like Snowflake and Anthropic, wouldn’t even consider Seattle because of the high business taxes along with crime issues and civil disobedience in the Capitol Hill section of Seattle in 2023.
He said he’s concerned that millionaires and billionaires would leave downtown Seattle because of the income tax, taking their companies with them.
Howard Schultz, the man credited with turning Starbucks into a global coffeehouse, announced on social media Wednesday that he and his wife left Seattle and now call Florida home.
Schultz, with an estimated net worth of $3.5 billion, didn’t mention the income tax in his announcement.
He did say, “It is our hope that Washington will remain a place for business and entrepreneurship to thrive, creating essential opportunity for those in Seattle and the surrounding areas.”
Schultz joined Amazon founder Jeff Bezos in becoming a Florida resident. Bezos moved from Seattle to Miami in 2023 –the same city that Schultz is moving to –shortly after Washington imposed a 7% capital gains tax on long-term stock or bond sales exceeding $250,000.
