Mark Harmsworth says ‘Washington legislative leaders need to wake up before it’s too late’
Mark Harmsworth
Washington Policy Center
There is a lot of talk about companies leaving Washington because of the capital gains tax (passed in the last few years) and the punitive income tax this year, but this is not the only reason.
Speaking with a financial services company owner who relocated his company out of state last year, including all the employees that wanted to move, stated that while the capital gains tax was a catalyst for the decision, other elements were at play.
In addition, the instability and uncertainty of Washingtons future weighing heavily into the decision to leave, the ability to hire well qualified employees was becoming more and more difficult.
For many smaller employers, hiring tech and financial talent is difficult given the high salary and benefit expectations of employees that see Amazon and Microsoft as the baseline for the salaries in the tech industry. Not all tech jobs pay as high as the tech giants do.
The new location for the financial services company has provided a much easier hiring process, lower cost of living and a better work life balance for the employees. Employee satisfaction has increased and productivity increases have followed.
The Puget Sound area has some of the smartest, highest paid tech workers in the nation which is why other companies, like Facebook and Google, have offices here to draw on that talent base. These are the very employees the capital gains tax and income tax target specifically.
The trickle-down effect will be those employees that are disenfranchised with the high taxes and high cost of living that are seeking a more cost-effective way of life, will seek options out of state. Look no further than the exodus from Seattle, the frontrunner of punitive taxes, to Bellevue. Amazon, once the largest employer in the city, has been eclipsed by the University of Washington. While Bellevue is still in Washington obviously, once the state starts implementing similar policies, the next logical step is to move out of state.
The FinTech company I spoke with said the new location is a big hit with the employees, their families and their pocketbooks. They don’t regret the move and with the introduction of the income tax, or even the threat of an income tax in Washington have no plans to move back. They, like many small businesses, are the canary in the proverbial tax mine.
Washington legislative leaders need to wake up before it’s too late. Put down the income tax, roll back the capital gains tax and consider something they might consider radical – a tax cut for business. The legislature has a history of broken promises. Instead, create a stable economic environment, promote Washington as a business-friendly environment, codify this into state law and those companies who haven’t started to leave might just stay.
Mark Harmsworth is the director of the Small Business Center at the Washington Policy Center.
Also read:
- 17th District lawmakers Kevin Waters and David Stuebe decry passage of state income tax bill after marathon floor debate
Reps. Kevin Waters and David Stuebe condemn Senate Bill 6346, warning the new state income tax sends more money into the general fund without real reform, risks expanding to every family, and ignores Washington’s affordability crisis. - Opinion: Washington’s fight for liberty
Conservative columnist Nancy Churchill argues that despite the passage of a new 9.9% state income tax, signs of shifting political momentum in Washington state give reason for hope and continued action. - 18th District Reps. Stephanie McClintock and John Ley denounce passage of state income tax
Following a marathon 24-hour House floor debate, 18th District Reps. Stephanie McClintock and John Ley denounce Senate Bill 6346, a new 9.9% state income tax on household income above $1 million, warning it could expand broadly, harm Washington’s economy, and face serious constitutional challenges. - Opinion: Brandi Kruse and I are feeling discouraged but we’re planning to continue advocating for political change. Will you?
Clark County Today Editor Ken Vance reflects on a discouraging week in Washington state politics, echoing Brandi Kruse’s frustrations over Democrats’ state income tax victory and local decisions on transit and ICE while urging conservatives not to give up on advocating for political change. - Opinion: ‘My thoughts on yesterday’s tragic state income tax’
Leslie Lewallen argues Democrats passed an unconstitutional “millionaires tax” on March 10, 2026, rejected more than 70 Republican amendments, and set Washington on a path she says will harm jobs, schools, and families statewide.
