Years of increasing taxes and regulations are leaving Washington employers facing the dreaded blue screen of death when it comes to their economic outlook.
For example, Microsoft President Brad Smith did not mince his words about Washington recently, stating, “Frankly, I have never been more concerned about the future of the tech sector in Washington state than I am today, and part of that has to do with the [tax] proposal.”
That’s not from some no-name startup or a disgruntled former employee. These words come from one of the most powerful tech executives in the country, sending a warning flare that the economic climate in Washington is becoming unsustainable for innovation.
Continuing on this theme of discontent, GeekWire warned:
"The ultra-wealthy from Seattle and Washington state may not exactly be looking to gamble away their riches in Las Vegas, but they are willing to take a bet on Nevada as a more welcoming environment when it comes to avoiding taxes on their fortunes. A new report from Bloomberg details how some wealthy former residents of Washington are fleeing to the desert to escape new tax proposals from state lawmakers. These potential taxes, on the heels of a 7% capital gains tax passed in 2021, would include a new 5% payroll tax on large employers, and a new 'financial intangibles' tax on wealthy individuals."
The latest tax increase ideas out of Olympia are just the newest reason in a long list as to why businesses are moving out of this state. Egregious Business and Occupation (B&O) taxes, a new stand-alone capital gains income tax (removing Washington from the list of no-income tax states), and burdensome regulations are suffocating the companies that serve as Washington’s economic backbone.
When Microsoft’s president raises alarm bells, policymakers ought to start paying attention. Businesses shouldn't be punished for providing citizens with job opportunities or using their earnings to reinvest in their companies for future growth.
With these massive tax increases, Washington lawmakers are going all in and betting that companies will grin and bear it. But smart companies know that they have choices, and fiscally conservative states are willing to answer the call and take the pot.
Fifteen years ago former Idaho Governor Butch Otter wrote a "love letter" to Washington businesses telling them there are alternatives to the state's high tax and regulatory burden. The Seattle Times noted:
"But just two years ago, Idaho Gov. Butch Otter easily lassoed a $3 billion plant that would have brought as many as 400 permanent jobs to the Tri-City area in Southeastern Washington — right out from under Gregoire’s nose. People close to the deal said the project was Washington’s to lose — and place the blame squarely on Gregoire.
A former congressman, Otter wears a cowboy hat in his Web site’s official photo, looking every bit the rootin’-tootin’-business-recruitin’ champion he suggests in his 'Love letter to our neighbors: Idaho is open for your business.' He notes Oregon raised taxes on businesses and that the Washington Legislature is poised to do the same.
Come to the Gem state, he invites, offering 'a business-friendly State government.'”
The best love letters are timeless. Perhaps it's time again for Washington businesses to leave behind the "Employer Beware" signs flashing in Olympia for the "Open for Business" promise provided by the record tax and regulatory relief of the Gem State.