(The Center Square) – A dozen Washington tech sector leaders have released a letter warning that a proposed income tax on people making $1 million or more a year could undermine their industry’s development and progression.
“As experts and innovators in the field of artificial intelligence, we write to strongly encourage you to pause the state’s efforts to create a state income tax and increase the capital-gains tax,” the Monday letter states.
“Washington state is competing for the talent required to build and scale AI products, companies, and jobs,” the letter states further. “Although we already have an initial base of AI labs, startups, and innovators here, Washington is starting to lose momentum, slowing our ability to attract and scale this critical economic sector.”
The letter to Gov. Bob Ferguson was signed by a variety of tech sector company leaders, including Allen Institute founding CEO Oren Etzioni, Read AI CEO and Co-founder David Shim, founder and former vice president for AI at Microsoft Luis Vargas, and SalesForce Software Engineering Vice President Paul Brown.
The letter also states that their industry is “is a core driver of our economy” and the income tax “would slow the AI innovation and investment momentum. An unfavorable tax climate with an income tax and capital gains taxes prevents Washington from building the ecosystem necessary to attract talent.”
The letter represents the latest opposition voiced by private sector entities to the income tax. The Association of Washington Business recently found that almost half of business owners are considering moving their personal residence out of state if the tax is enacted.
Last week, HD Fowler Chairman and President Jed Fowler announced he would be stepping down as chairman after he testified in favor of the income tax in early February.
Senate Bill 6346 would enact a 9.9% tax on annual personal income exceeding $1 million for individuals and households. The proposal advanced out of the state Senate in a 27-22 vote and was voted out of the House Committee on Finance on Feb. 27.
As written, SB 6346 would take effect immediately due to an emergency clause, which denies voters the ability to challenge it directly in November via a referendum.
