John Braun commentary: Income tax gives people another reason to take their money and run
Friday, March 27, 2026
One of the many arguments Republicans made against the new state income tax is that it will lead to more capital flight. People will decide it’s time to flee from our state and take their financial assets with them.
The way we conservatives see it, Washington residents whose taxable income is high enough to be subject to the 9.9% tax in Senate Bill 6346 are likely smart enough to compare the pros and cons of the added tax burden. If the cost outweighs the benefits of living here, they have the means to establish residency elsewhere. For many, it will be the proverbial straw that breaks the camel’s back.
Supporters of the income tax would rather not talk about this. It’s entirely believable, however, because many Washingtonians have already headed for the exits as taxes have increased.
Newly released data from the federal Internal Revenue Service show that in 2021, our state began seeing a net loss of taxpayers. The agency tracks it as “migration.” A year later, the effect of this migration expanded. Now there was a net loss of income along with the loss of taxpayers.
This reversal is important, as the IRS data for our state (which we’ve posted online at https://src.wastateleg.org/exitwa/) showed net gains in taxpayers and income every year of this century. What changed?
Our state’s income tax on capital gains could certainly be a cause. The beginning of the taxpayer and income migration fits perfectly between the Democrats’ passage of that tax in 2021 and the onset of its collection two years later.
It could also be that more people decided to exit Washington after doing their own cost-benefit analyses. They saw how living here has become unaffordable and had no faith that Democrats would or could turn things around.
This is validated by a separate study, also released in March, which found the cost of living here has increased faster than any other state during the past decade. Although California still rates last for affordability, prices have gone up more than twice as fast in Washington.
The research was conducted by the Washington Roundtable, a long-established policy-driven group of leaders from major employers. It also found that in five popular categories — gas, child care, rideshare services, dining out and buying a home — Washington is among the five most expensive states in the nation.
While the Seattle-Tacoma-Bellevue region ranked fifth among the most expensive metropolitan areas in the country, and worst outside California, it had company: four other regions in our state fell between 22nd and 29th, meaning they’re less affordable than 92% of the 386 metro areas considered in the study.
The Washington Roundtable study confirmed the lopsided pattern of migration indicated by the IRS numbers. It used federal census figures to calculate a net loss of more than 55,000 Washington residents from 2021 through 2023.
Again, those who have already fled from our state didn’t have the new income tax as an incentive, so imagine what lies ahead.
As more people relocate, reducing the amount of income tax collected, there will be a move to ratchet the income deduction downward to expand the pool of taxpayers. That’s why this is not an issue only for people who are well off — we all should be concerned because the tax is designed to apply to everyone.
Yet those who want to end Washington’s 90-plus years as an income tax-free state seem to be in denial that it could lead to more capital flight, or tax migration.
If people want to “organize their life” based on whether they have to pay a state income tax, the prime sponsor of SB 6346 told reporters back in January, they have the option to leave Washington, but he didn’t see that as very likely — adding “a lot of them would be happy to pay their fair share.”
Ex-Washington resident Jeff Bezos decided he would be happier in Florida. That enabled the Amazon.com founder to avoid paying Olympia a capital-gains tax bill estimated at $600 million or more. Ken Fisher left Camas and took his investment-company headquarters to Texas.
Right after Democrats pushed their income-tax bill through in Olympia, Starbucks founder Howard Schultz announced he too had traded a Washington address for one in no-income-tax Florida.
Those former Washingtonians are listed on the Senate Republican “ExitWA” webpage, along with more businesses and business leaders who decided the benefits of being in Washington didn’t justify the cost — like Dr. Ed Schweitzer and Rise Baking Company. While you may not know those names, our state Department of Revenue did.
I’m reminded of another Democratic senator who didn’t just scoff at the idea that successful Washingtonians would leave if they were targeted with new taxes. She called it “sad,” declaring those who have enjoyed great success in our state are obligated to ensure the next generation has the same level of success.
That in turn made me think of how New York’s governor recently acknowledged the reality of capital flight when she publicly begged wealthy former residents to return from Florida, because her state’s tax base has been eroded — yet only a few years ago she basically taunted those same affluent people to leave if they didn’t like New York’s tax burden.
I’d argue that a successful person like Dr. Schweitzer has already done his share, providing good jobs to multiple generations and paying lots of taxes to support his community, not to mention his generous charitable donations. Now he’ll be successful from Idaho instead.
Sending more money to Olympia through an income tax won’t ensure better student test scores, protect children from drug-addicted adults, or make our communities safer. Contrary to what Democrats claim, the new income tax won’t even guarantee free school meals to all K-12 students.
While Washington is a beautiful place, looks aren’t everything. The cost of living here has increased faster than any other state during the past decade, and the tax-migration numbers prove people will leave. Unless the income tax is stopped by the state Supreme Court or by the voters, we should expect it will push more people and their job-creating capital toward the exits. This is not how our state does better.
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Sen. John Braun of Centralia serves the 20th Legislative District, which spans parts of four counties from Yelm to Vancouver. He became Senate Republican leader in 2020.