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SEATTLE – A powerful coalition of Washington’s largest employers — including Amazon, Microsoft, Alaska Airlines, and Costco — is urging state leaders to halt plans for sweeping tax increases, including a controversial payroll and wealth tax package
In a letter addressed to Governor Bob Ferguson and legislative leaders, the companies argue that the proposed measures threaten the state’s economic stability and risk pushing high-paying jobs out of Washington.
The Letter: “Think Again”
The letter — co-signed by Alaska Airlines, Amazon, Microsoft, Nordstrom, PSE, Zillow, T-Mobile, Redfin, Weyerhaeuser, and the Seattle Mariners, among others — criticizes what they call “the largest tax increases in state history.”
Key concerns outlined in the letter:
- The state operating budget has more than doubled in a decade, with a 37% increase in just the past four years.
- Even without new taxes, revenue is expected to grow by 6.8% in 2025–2027 and 7.7% in 2027–2029.
- Proposed tax hikes could grow revenues by 15% in just two years, which companies argue is excessive and unsustainable.
Microsoft’s Brad Smith: Wealth Tax Would “Destroy Jobs”
Microsoft President Brad Smith told KOMO News that implementing a wealth tax or expanded payroll tax would force businesses to relocate jobs to more cost-effective regions — like Idaho or Vancouver, Canada, where labor costs are at least 30% lower.
“We’re asking the legislature to think again,” Smith said.
“The wealth tax would cause people to leave the state. It would discourage new companies from forming in Washington.”
Smith noted that Amazon has already reduced its Seattle workforce by 10,000 since the city’s earlier payroll tax, while adding 25,000 jobs in Bellevue.
What’s on the Table? SB 5796 and $4B in New Revenue
At the center of the debate is SB 5796, which proposes a 5% payroll tax on high-earning wages that are currently exempt from federal Social Security and paid family leave taxes. Lawmakers project it would generate $4 billion to address a $16 billion deficit.
Democrats argue that the tax:
- Targets large, profitable companies
- Levels the playing field for middle-income taxpayers
- Funds education, healthcare, and public safety
What Lawmakers Are Saying
Sen. Rebecca Saldana (D-Seattle) defended the bill:
“Washington’s world-class workforce exists because we’ve made strategic investments. This tax ensures that those who benefit most contribute their fair share.”
She added that fears of job losses are overstated, and that business relocation is influenced by many factors, not just tax policy.
Rep. Joe Fitzgibbon (D-West Seattle) added:
“We can’t run the state for free — not education, not public safety. If businesses oppose this tax, they should suggest alternatives.”
What’s Next?
Gov. Ferguson has said he will veto any budget package without a wealth tax discussion, but also cast doubt on the legality of including such a measure at all. Business leaders have not yet offered a unified alternative.
Negotiations are expected to continue into the summer as lawmakers attempt to balance economic growth with social investment.
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