An American Dream in Washington — and Why It Moved to Arizona

The proposal to implement an income tax in our state is likely to have significant consequences on the future of our economy. While income tax proponents claim it is a myth to think this new tax will cause business owners and others impacted to leave the state, the evidence suggests otherwise. A recent survey conducted by the Association of Washington Business (AWB) asked business owners if they are considering changing residency to another state. The results were staggering; 44% of those business owners surveyed confirmed that they are considering moving out of state.

There is also strong anecdotal evidence for a future exodus from our state due to the increased tax burden. While it is understandably challenging for individuals and business owners who are considering moving or have moved already to go on the record due to fear of retribution from state agencies, we were able to speak with Rich and Carol Griswold-Bacigalupi, who are both former Whidbey Island residents, to learn more about what led to their move away from the state.

Rich and Carol were both longtime Washington residents who moved from California to the Puget Sound region for its natural beauty, business-friendly policies, and low-to-no-tax environment. They recently moved to Arizona, so we spoke with them to learn more about what led them to leave the state they love.

Rich and Carol owned several rental properties, which they rented at below-market rates to support local families. This worked well for both them and their tenants until the Washington State Legislature adopted statewide rent control in 2025. Once that law was passed, they informed each tenant that, due to changes in WA tenancy laws, they were going to exit the landlord business. As a result, the properties are in the process of being sold, with the state’s rent control policy having a direct negative impact on them, as well as their former tenants.

The estate/death tax compounded the issue for Rich and Carol. Increasing the estate tax to 35% (the highest tax rate in the country) led them to worry about their children should something happen to them. “The portions of our estate that matter the most to our family would need to be liquidated just to pay the estate tax if something happened to us,” Rich commented.

The nail in the coffin for Rich and Carol, and their future in Washington State, was the proposal, currently under debate in the State Legislature, to adopt an unconstitutional income tax. In addition to the unconstitutionality of this proposal, there are several reasons why a state income tax is a bad idea and why they decided to accelerate their move to another state at the end of 2025: Voters have repeatedly rejected an income tax, Washington will lose its competitive advantage in attracting businesses, and the promise of a “millionaires only” tax will not last. What will begin as an exodus of business owners with pass-through entities, such as LLCs and S-Cops, both inside and outside of WA State, and certain wealthy individuals, will inevitably turn into an economic environment where the middle-class will suffer throughout Washington State as the tax is eventually expanded to more and more wage earners and economic opportunity is stunted. This point was recently confirmed when Democrats in the WA State Senate refused to consider an amendment that would have kept the tax applying to adjusted gross income above $1M.

Rich and Carol are now residents of Arizona. While they still love Washington and hope for a positive future for its residents, they believe that the income tax and the other cumulative tax burdens will have a strong, negative impact on Washingtonians and the state’s economy in the years to come.

They stated job creators are leaving the state in unprecedented numbers. Several of their friends have left over the past few years. WA State Democratic leaders deny this fact. A simple survey of local accounting firms, attorneys, and real estate agents asking how many of their clients left WA State in 2024, 2025, and are doing so in 2026 would tell a much different story than the talking points being used by the legislative and executive supermajority of Democrats in WA State.

This story is just one of many authentic examples of individuals and business owners who have left or are considering leaving Washington State because of the possible adoption of an income tax by our State Legislature and Governor. There will undoubtedly be more people in Rich and Carol’s situation if the income tax is passed. If this proposal is not defeated, either in the Legislature or in the courts, the future of our state, its businesses, and its residents is at risk.