Washington has the third-best economy in the country, with tech jobs and innovation driving a significant share of this growth. Yet, the Legislature is considering proposals that threaten to undermine this growth and damage Washington’s future.
That success was built by innovators and employers despite an increasingly hostile tax environment – not because of it.
Two proposals on the table in this year’s legislative session – a 9.9% tax on high earners and a 5% employer payroll tax – would weaken the very conditions that allow Washington families and businesses to thrive.
It was just last year that Washingtonians faced the threat of a $4,375 tax hike and increased business taxes that would have left the state at risk of losing over 27,000 jobs – outcomes that were ultimately avoided by the passage of the Working Families Tax Cut last July.
But Washington families – and employers – barely had time to catch their breath before facing the threat of yet another tax hike from their own state legislature.
Passing these tax proposals would be destructive, burdensome, and irresponsible.
If lawmakers care about maintaining a strong economy that encourages innovation, investment, and job creation, they must reject the tax hikes that threaten the very businesses that make their state prosper.
Instead, Washington should reduce wasteful spending in its own government, as the state budget has more than doubled in the last decade.
The issue isn’t whether businesses are paying enough in taxes; it’s whether a rapidly expanding state government should continue shifting the cost of its spending onto employers.
During the same period, Washington has only increased business taxes. In the last year alone, businesses were hit with $9.4 billion in additional taxes, driving the tax burden on Washington businesses 21% above the national average.
This isn’t the first time Washington has tried to shift the financial burden to its businesses. In 2021, Seattle passed the JumpStart payroll tax – a tax on employers with payroll expenses that exceed $7 million.
The results were immediate. After this policy took effect, Seattle lost 5,800 jobs, and major employers, including Amazon, moved jobs out of the city.
At the same time, Bellevue gained 4,400 jobs, underscoring how policies aimed at employers can influence where jobs ultimately land.
Repeating this failed policy on a larger scale would be reckless. If a statewide payroll tax were to take effect, employers wouldn’t just flee to a nearby city; they would leave the state altogether.
Similarly, passing the proposed tax increase on Washington’s high earners would only worsen the state’s business competitiveness, signaling to employers that they will be penalized for building their businesses.
California is already showing warning signs of the consequences of enacting this type of tax. A proposed wealth tax on high earners is already driving billionaires and job creators to leave the state in search of more business-friendly environments. Others openly state that they will consider doing the same if the tax hike takes effect.
If we follow in California’s footsteps, this story will repeat itself.
And at a time when Washington already ranks 45th in the country for its business tax climate, we should be making it more attractive to bring – and keep – business here, not driving out the companies that are already doing so.
That’s why over 12,000 Washingtonians engaged in a hearing at the beginning of this year, stating their opposition to the Legislature’s proposed payroll tax. Ignoring their concerns — and failing to address their need for tax relief — while levying higher taxes is irresponsible governance.
The reality is clear: businesses can’t survive if the financial burden keeps rising. And our state cannot afford to lose the greatest contributors to our growth simply because of irresponsible policy.
Lawmakers must listen to their own citizens. It’s time to end the cycle of excessive taxation and put Washingtonians first. The state’s future depends on it.
Heather Andrews is the Western Regional Director for Americans for Prosperity.
