The Wall Street Journal: The High-Tax State Brain Drain

According to the Wall Street Journal, high tax states such as California, New York, and Illinois are losing high earning households to no-income tax states like Florida and Texas. In fact, these two states alone “attracted more than twice as many such households as any other state.” 

But what does that have to do with Washington?

From the WSJ:

Washington state also ranked in the top 10 gainers of young affluent households, along with Colorado, North and South Carolina, Arizona, and of all places New Jersey.

Although Washington state doesn’t tax wage income, Democrats imposed a 7% tax on capital gains above $262,000 in 2022. An initiative to repeal the tax is on the ballot this November. Do Washington voters want their software engineers and entrepreneurs following those migrating from Silicon Valley to Austin?

The capital gains income tax has already chased out one of the very people who helped make Seattle a tech hub and resulted in the new CEO of Starbucks commuting 1,000 miles by jet to Seattle to avoid paying the 7% tax on his stock compensation. 

If we are to avoid the plight of states like California and New York, we need to remember these high-earning households can walk right out the door.