WPMA News / Fall 2026 51 State Report S Seattle Waves Goodbye to Its Tax Base If Olympia is the laboratory, Seattle is the demonstration project. Mayor Wilson entered office promising a more progressive city built around affordability, public ownership and higher taxes on wealthy residents and large employers. Seattle already had its JumpStart payroll tax, and voters subsequently approved a 5% employer-paid tax on compensation above $1 million to fund publicly owned social housing. At the state level, lawmakers added what has become widely known as the “Millionaire Tax”— a 9.9% tax on annual income above $1 million—scheduled to take effect in 2028 unless voters repeal it. When business leaders warned that employers, investors and high earners could relocate, the mayor dismissed the concern. Her casual wave and “bye” may have thrilled the activist class, but it sent a less comforting message to the people who sign paychecks and make long-term investment decisions. Those decisions are already producing an uncomfortable com- parison. A Downtown Seattle Association analysis reported that downtown Seattle has lost approximately 30,000 jobs since the JumpStart tax took effect. From 2023 through 2025, Seattle’s employment reportedly declined 1.3%, while nearby Bellevue gained 12.6%. Apparently, the jobs did not disappear. Some may simply have crossed Lake Washington in search of a city that seemed happier to have them. Seattle is also confronting a budget shortfall that has approached half a billion dollars. The familiar answer is a combination of proposed taxes, selective cuts and assurances that one more source of revenue will finally make the numbers work. It is an odd strategy: make the city more expensive for employers, lose some of the economic activity that supports the tax base, and then ask those who remain to contribute more. Even Mayor Wilson recently acknowledged that it is less expen- sive to do business in Bellevue than in Seattle. In most cities, that would inspire an urgent conversation about competitiveness. In Seattle, it may qualify as a tourism campaign for the Eastside. Voters Get Their Say Washington voters will have several opportunities this November to respond to the direction of the state. Let’s Go Washington has advanced three statewide initiatives. I-001 concerns parents’ rights to information involving their children in public schools. I-638 addresses participation in girls’ sports. I-645 would repeal the “Millionaire Tax,” prohibit state and local individual income taxes and leave the associated benefits in place. For business owners, the initiative to repeal the Millionaire Tax may have the greatest long-term consequence. Washington’s lack of an individual income tax has historically helped distinguish it from other high-cost West Coast states. Whether voters choose to preserve that advantage—or allow the state to continue building a new tax structure—will send a powerful signal to employers considering where to invest. Washington’s 3rd Congressional District will also attract national attention. Democratic Representative Marie Gluesenkamp Perez faces Republican state Senator John Braun in a district Donald Trump carried in 2024. The candidates finished the August pri- mary separated by only 263 votes. The district’s mix of manu- facturing, timber, agriculture, transportation and small business makes the contest particularly relevant to our industry—and a useful measure of how working-class voters are responding to the cost of living and doing business. In central Washington, voters will select a successor to retiring Republican Congressman Dan Newhouse. Republican Yakima County Commissioner Amanda McKinney faces Democrat John Duresky in a district anchored by agriculture, transportation and energy-intensive businesses. A Warning to the West It is tempting for those outside Washington to watch all this with detached amusement. A gas tax that increases automatically. A carbon market that adds costs no politician wants displayed on a fuel receipt. A socialist mayor waving goodbye to taxpayers while businesses discover Bellevue. Seattle even managed to open a long-awaited light-rail line across Lake Washington only to investigate whether electrical components near the floating bridge contributed to the deaths of roughly 2,000 fish. You could not invent a more Washington story: spend years building environmentally friendly mass transit and then have to rescue the fish from it. But the larger lesson is serious. Policies travel. Carbon-pricing programs, road-usage charges, payroll taxes and automatic tax increases rarely remain confined to the state where they begin. They are packaged, renamed and presented to legislators else- where as innovative solutions. That is why petroleum marketers throughout the West should watch Washington closely. Our state is testing how far govern- ment can raise the cost of energy, employment and investment before businesses and taxpayers change their behavior. Seattle’s mayor may be comfortable waving goodbye to those who leave. The rest of us should be asking who will remain to pay the bills—and which Western state will try the experiment next. Save the Date: Holiday Party, December 3rd, 2026 at Lucky Strike, Bellevue, WA Washington Energy and C-Store Conference, June 16-18, 2027 at The Centennial by Davenport Hotels, Spokane, WA
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