Opinion | Olympia’s Plan to Repel Startups

Published
Score
2

Why it matters

Core event: Washington state Democrats introduced House Bill 2724 and Senate Bill 6346, dubbed the "Millionaires’ Tax," imposing a 9.9% tax on individuals with Washington taxable income over $1 million, effective January 2028; it starts from federal adjusted gross income (excluding most long-term capital gains unless already subject to the state's existing capital gains tax), offers a $1 million standard deduction per household (inflation-adjusted from 2030), and is projected to generate $3-4 billion annually for education, health care, and public defense.[1][2][3][5]

Key players: Proponents include Senate Majority Leader Jamie Pedersen (D), who sponsored SB 6346, and Gov. Bob Ferguson, who supports it if tied to inflation adjustments and relief like expanding the Working Families Tax Credit or zeroing B&O taxes for small businesses.[1][2][4] Opponents feature Rep. Ed Orcutt (R), ranking House Finance Committee member warning of economic harm and future threshold creep akin to recent sales, B&O, capital gains, and estate tax hikes; House Republicans criticize minimal tax relief and double taxation despite credits.[1][3] Tech leaders express fears of startup exodus, echoing the opinion piece's Bezos reference.[5]

Context and timeline: Washington lacks a broad income tax, blocked by voter-passed Initiative 2111 in 2024 prohibiting them, but Democrats now amend it via these bills amid fiscal pressures; prior changes expanded other taxes, and Ferguson pushed government "right-sizing" last year.[1][3][4] Bills introduced early February 2026; SB 6346 held a public hearing in Senate Ways & Means Committee on February 6, House version referred to Finance Committee without a hearing yet; session ends March 12.[1][2]

Newsworthiness: Fresh hearings and opposition amplify debates on repealing voter will, deterring high earners/tech firms (e.g., startup fallout warnings), and funding services amid economic risks like business flight—timed with the headline's February 9 critique linking to Washington's 7-9.9% capital gains tax.[1][2][3][5]

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