Washington's proposed millionaire tax will destroy the state's economic competitiveness
Source: Jared Dillian. "Washington's millionaire tax is economic suicide." February 18, 2026. reason.com
The Gist
The author argues that Washington state's plan to tax millionaires at nearly 10% will backfire by driving away the wealthy people and businesses that made the state prosperous. He believes this will turn Washington from a low-tax success story into a high-tax economic failure.
Conclusion
Washington's proposed 9.9% tax on income over $1 million will cause economic decline by driving away wealthy taxpayers and businesses
Premises
- Washington has experienced decades of spectacular economic growth specifically because it lacks a state income tax
- Capital flows to where it is treated best, as evidenced by migration patterns since 2017 tax changes
- The 9.9% rate would make Washington one of the highest-taxed states in the country overnight
- Red states cutting taxes are experiencing higher growth rates while blue states raising taxes are losing economic advantage
- Historical examples show that low-tax jurisdictions consistently outperform high-tax ones economically
- Income taxes inevitably expand over time to affect more taxpayers at lower income levels
- Wealthy individuals like Jeff Bezos have already demonstrated they will relocate to avoid Washington's taxes
Assumptions
- Tax policy is the primary driver of business location decisions
- Wealthy individuals and businesses are highly mobile and will relocate based on tax rates
- Economic growth is primarily driven by attracting and retaining high earners
- Government spending funded by higher taxes provides less economic benefit than private investment
- Past patterns of tax expansion and migration will continue in the future