Democrat legislative leaders Push for New Income and Wealth Taxes as Businesses Close and Washington’s Competitiveness Plummets
Just months after passing the largest tax increase in state history — a $12.5 billion package — Democrat leaders in Olympia are already looking for new ways to take more. Now they’re floating two new tax proposals a 9.9% income tax and a statewide wealth tax targeting assets like stocks, investments, and property holdings.
They say these new taxes will make Washington’s tax code “more fair.” But this isn’t about fairness — it’s about feeding a government that has already more than doubled in size over the last decade.
In just the past ten years, state spending has exploded from roughly $34 billion to more than $70 billion. Despite record-breaking tax collections, the state’s leaders keep coming back for more. Their most recent $12.5 billion tax package — which raised property, payroll, and fuel taxes — is already falling nearly a half-billion dollars short of revenue projections. And instead of asking why, they’re doubling down on the same failed approach: raise taxes again.
At some point, you have to ask — how much is enough?
Washingtonians have made their position clear. Voters have rejected an income tax ten times, across every decade and political climate since the Great Depression. But Olympia keeps trying to find creative ways to sneak one in — from capital gains and wealth taxes to now, an income tax.
Small business owners will get crushed under this type of income tax. That’s because many Washington businesses — from contractors and medical practices to family-owned restaurants — are structured as S-corps or LLCs, meaning their business income is reported as personal income. This additional 9.9% tax hits them directly. These are the people creating jobs and keeping our local economies alive — not the ultra-rich caricatures some in Olympia likes to invoke.
And they’re already struggling. In just the past few months, a wave of longstanding Washington businesses has closed their doors or some of their stores: Fred Meyer (cited reason: crime and regulation), Rock Wood Fired Pizza (taxes and regulation), Starbucks (crime), another Starbucks (crime), and Kidd Valley Burgers (regulation) are just some examples.
On Brandi Kruse’s Undivided, Justin Stiefel, owner of Heritage Distilling, made the point that any business has three partners: the customer, the community (including suppliers, vendors, etc), and the government. With partners 1 and 2, everything is great. But he cited numerous examples of current and looming taxes as the reason for needing to close locations in both Washington and Oregon.
It’s no coincidence that Washington now ranks 45th in the nation for tax competitiveness, according to the nonpartisan Tax Foundation. The combination of skyrocketing taxes, unpredictable regulation, and relentless anti-business policymaking is pushing investment — and opportunity — out of the state.
Olympia’s leaders repeatedly fail to anticipate the consequences of their policies. They assume every tax increase will produce stable revenue, but the opposite is true. When you punish success, you get less of it. The $12.5 billion tax hikes they passed earlier this year are already underperforming — and these new proposals would only accelerate the flight of jobs, talent, and capital.
The truth is simple: Washington doesn’t have a revenue problem. It has a spending problem.
Lawmakers have a choice. Democrat lawmakers can keep chasing new ways to raise taxes and watch more businesses close, more families move away, and more jobs disappear. Or they can finally take responsibility for the size of government they’ve built — and start asking how to make state spending sustainable and accountable to the people footing the bill.