Washington's proposed income tax will drive away entrepreneurs and harm the state's economy
Source: Matt McIlwain. "Opinion: The narratives and realities of an income tax in Washington – GeekWire." March 2, 2026. www.geekwire.com
The Gist
The author argues that Washington's proposed income tax will backfire by driving away the very entrepreneurs and wealthy individuals who create jobs and economic growth. He claims people are already leaving due to high taxes, and adding an income tax will make this exodus worse, ultimately hurting the state's economy more than helping it.
Conclusion
Washington state should not implement the proposed income tax because it will drive away entrepreneurs and innovators, ultimately harming the state's economic competitiveness and innovation ecosystem
Premises
- Income taxes historically expand beyond their initial scope to affect broader populations, despite legislative promises to limit them to high earners
- The state's spending has increased dramatically ($9 billion last year, $2 billion more this year) and the budget can be balanced by reducing spending rather than raising taxes
- The combination of high estate taxes (20%), capital gains taxes (10%), and the new income tax (10%) creates an unsustainable tax burden that motivates relocation
- People are already leaving Washington state in significant numbers due to existing tax policies, as evidenced by increased requests for legal services to change residency
- Washington's business reputation has declined dramatically (from top 5 to bottom 5 in five years), making it less attractive to future entrepreneurs and job creators
- Successful entrepreneurs who leave take their economic contributions, job creation, and philanthropic giving to other states
Assumptions
- Economic growth and innovation are primarily driven by entrepreneurs and high earners
- Tax policy is a primary factor in business location decisions
- Reducing government spending is preferable to increasing tax revenue
- Washington state's economic competitiveness depends on attracting and retaining wealthy individuals
- The legislative framing of the tax as an 'emergency' measure and 'millionaire's tax' is deliberately misleading