Concerns Surround Washington State’s “Millionaire Tax”
In Washington state, the recent “millionaire tax” has cast a shadow over business owners, who worry it may widen its net to include those earning less than a billion dollars. The implications of this tax have business operators, like barber Matt Humphrey from Seattle, feeling particularly anxious about potential repercussions.
Humphrey, who runs shops in Ballard and Roosevelt, recently shared his worries, stating, “There’s a lot of fear and anxiety about what’s going on with our government when it comes to taxes. This new billionaire tax is definitely going to affect us. We’re afraid… They’re treating us like an ATM in terms of taxes as small businesses.”
A new “billionaire tax” that has drawn opposition from conservative circles was recently approved by the state’s Democratic Party. An editorial board described it as a “fraud” that could harm middle-class workers.
This tax will impose a 9.9% rate on income that exceeds $1 million per year, only impacting earnings beyond that threshold. Set to begin on January 1, 2028, the first payment will be due in April 2029.
Historically, voters in Washington have been resistant to income tax proposals, though the current Democratic majority in the legislature asserts this tax is essential. One lawmaker expressed concern that the tax threshold might eventually drop from $1 million to $500,000 or even $250,000, potentially impacting all residents. This situation could result in a universal income tax being established with minimal opposition.
After the millionaire tax’s passage, Howard Schultz, the founder of Starbucks, announced plans for his family to move from Seattle to Florida. Interestingly, reports noted that Starbucks has already started relocating some corporate operations to Tennessee, a state known for lacking a personal income tax and offering a more favorable corporate tax environment compared to Washington.
Seattle’s mayor, Katie Wilson, has expressed supportive sentiments towards immigrants but also acknowledged possible economic burdens they could place on working-class Americans through various channels, such as wage reduction and increased rents. Additionally, she claimed that some immigrants may contribute to criminal activity, further complicating the cost burden on businesses and communities.
According to the article, there’s a concern that this new tax is aimed not just at billionaires but could eventually impact those earning much less. Steve Gordon, who heads the Gordon Truck Center in Pacific, Washington, echoed these worries. “Income tax is the latest battle here. But while they frame it as ‘just a tax on billionaires,’ it’s built upon numerous other taxes that don’t stop at the wealthy,” he said. “There’s nothing to prevent it from reaching regular folks. People seem to understand that what begins as a tax on billionaires could soon include them as well.”
In February, JPMorgan Chase CEO Jamie Dimon pointed to a trend of individuals relocating from blue states to red ones, emphasizing that cities need to compete not just on quality of life but also on taxes. He observed that places like California and New York are experiencing significant outmigration due to high taxes, which ultimately can harm urban areas.
“People mistakenly think raising taxes on the wealthy is morally justified,” he stated, “but in reality, it’s detrimental to their city. The evidence is clear: people are choosing to leave.”
