Seattle's Millionaires Tax Sparks Exodus of Businesses

Proposed 9.9% levy on incomes over $1 million raises concerns about economic impact and potential constitutional issues

Apr. 10, 2026 at 9:26am

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A dynamic, fractured painting in shades of blue, grey, and green depicting the Seattle skyline with cranes and skyscrapers, conveying the unsettled business climate in the city.As Seattle's millionaires tax sparks an exodus of businesses, the city's skyline reflects the turbulent economic changes.Seattle Today

A new 'millionaires tax' in Washington state has sparked fear and uncertainty among Seattle business owners, who worry the policy could drive companies out of the city. While progressives and socialists celebrate the move towards a fairer tax system, conservatives and business leaders argue the tax could ultimately target them and harm the local economy. High-profile companies like Amazon and Starbucks have already announced plans to leave Seattle, raising questions about the long-term consequences of the tax.

Why it matters

The millionaires tax is part of a broader trend of 'blue' states and cities seeking to tax the wealthy more heavily. However, business owners warn that these policies could backfire, leading to an exodus of companies and talent. The debate highlights the tension between progressive goals of addressing inequality and the concerns of the business community about the economic impact of higher taxes.

The details

Washington state's Democrats recently introduced an income tax targeting households earning over $1 million annually. The tax, set to take effect in 2028, imposes a 9.9% levy on income above the $1 million threshold. While supporters argue the tax will address wealth inequality and fund public institutions, business owners like Matt Humphrey and Steve Gordon fear it will eventually expand to include regular citizens and small businesses. The tax climate has already led to the departure of prominent companies like Amazon and Starbucks from Seattle.

  • The millionaires tax is set to take effect in 2028.
  • Seattle already has the highest combined state and local sales tax rate in the country at 10.35%.

The players

Matt Humphrey

A barber with locations in Seattle's Ballard and Roosevelt areas, who expresses concerns about the impact of the tax on small businesses.

Steve Gordon

The principal of Gordon Truck Centers, who is worried the tax will eventually expand to include regular citizens, not just millionaires.

Shaun Scott

A member of the Seattle Democratic Socialists of America and State Representative, who defends the tax as a popular policy to address wealth inequality and underfunded public institutions.

Vijay Boyapati

A former Google software engineer who moved to Seattle to escape California's high taxes, and questions the effectiveness of increased taxes, citing poor educational outcomes.

Katie Wilson

The socialist mayor of Seattle, who has hinted at pursuing additional taxes on the wealthy and big businesses.

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What they’re saying

“They treat us like an ATM.”

— Matt Humphrey, Barber

“Don't let this happen to you. Look closely at the taxing of small businesses and the potential constitutional implications.”

— Matt Humphrey, Barber

“It's a popular policy, supported by both Republicans and Democrats, to address wealth inequality and underfunded public institutions.”

— Shaun Scott, State Representative

“Those with more can afford to pay more into the system, making Washington an even more competitive place.”

— Shaun Scott, State Representative

“The focus should be on addressing these issues rather than simply throwing more money at them.”

— Vijay Boyapati, Former Google software engineer

What’s next

The judge in the case will decide on Tuesday whether or not to allow the millionaires tax to move forward.

The takeaway

The debate over Seattle's millionaires tax highlights the broader tension between progressive goals of addressing inequality and the concerns of the business community about the economic impact of higher taxes. As 'blue' states and cities continue to experiment with taxing the wealthy, the long-term consequences remain uncertain, with the potential to drive businesses and talent away.