With the state of Washington on course to enact a punitive tax on its wealthiest residents, it comes as no surprise that they are abandoning ship and looking for a better America in the Super States. Matthew Hennessey reports in The Wall Street Journal that Howard Schultz, the man who built Starbucks into a global behemoth from its beginnings in Seattle, has moved to Florida. And it’s no mystery why. Hennessey writes:
You don’t have to be a certified public accountant to figure out why all the rich guys are leaving Washington state. Mr. Schultz’s announcement came as Democratic lawmakers in Olympia were ramming through a punitive 9.9% “millionaire’s tax” on high-earners. The levy is projected to fall on about 20,000 Washington taxpayers, but the revenuers will have to act fast to catch them. Washington loses a taxpayer every 30 minutes according to a 2025 National Taxpayers Union Foundation report.
At the Tax Foundation, Jared Walczak explained the ramifications of the tax proposal, writing:
Washington lawmakers are holding their first hearing on long-anticipated legislation that would create a new 9.9 percent tax on income over $1 million. It comes only two years after lawmakers approved an initiated statute prohibiting state or local income taxes, and presents a direct challenge to over 90 years of judicial precedent restricting the adoption of income taxes in the state. Voters have rejected income tax proposals 10 times, most recently in 2010.
Washington already taxes capital gains income above $278,000, at rates of 7 and 9.9 percent. The new tax would coexist with the capital gains income tax—albeit sometimes uncomfortably—rather than replacing it.
As we have noted previously, the proposed tax would yield a top rate of more than 18 percent in Seattle when combined with two Seattle wage taxes and a statewide uncapped payroll tax, making it the highest rate on wage income in the country. The proposed tax would fall largely on small business owners and on tech workers receiving Restricted Stock Units (RSUs) in compensation, and would be particularly detrimental to employees at startups that have yet to go public and whose RSUs could all vest at once.
The move will mark another step in the tax divergence between red and blue states, with red states lowering taxes and blue states increasing them.
Action Line: All Americans want to live where they are best treated. States that continue to punish productive residents will watch those residents flee to where they are welcomed by politicians who put residents’ needs ahead of their own political agendas. If you’re looking for a better America, begin your search with Your Survival Guy’s 2026 Super States. And click here to subscribe to my free monthly Survive & Thrive letter.
Originally posted on Your Survival Guy.
