Amazon, Alaska, Costco, Microsoft, Nordstrom asking Washington to skip payroll, wealth tax
SEATTLE — Dozens of major companies have sent a letter to Washington’s governor and state legislature to “review and revise” the tax and budget proposals, saying they threaten the state’s economic stability.Alaska Airlines, Amazon, Costco, Microsoft, Nordstrom, PSE, Zillow, T-Mobile, Redfin, Virginia Mason, WaFd Bank, Weyerhaeuser, Puget Sound Energy, and the Seattle Mariners were among the co-signers on the letter addressed to Gov. Bob Ferguson, State Senate Leader Jamie Pedersen, House Speaker Laurie Jinkins, and Minority leaders John Braun and Drew Stokesbury.This comes a day after Ferguson said he would veto any bill with a proposed wealth tax off the table in any spending package amid approvals by the House and Senate for a slew of new taxes.“These proposals would result in the largest tax increases in state history, perpetuating a dangerous trend of unsustainable spending growth,” the companies wrote in the letter. “Over the past decade, the state operating budget has more than doubled, with a 37 percent increase in just the last four years. This growth far exceeds state increases in population, inflation, and personal income, threatening our economic stability.”RELATED | Ferguson says a wealth tax will be vetoed, urges new discussions to close $16B deficit“Given national economic trends, Washington state cannot sustain continued tax and spending increases and simultaneously maintain our economic resilience and competitiveness,” the companies added in the letter. “Even with no new taxes, existing revenue sources are projected to rise by a healthy 6.8 percent in the 2025-2027 biennium and 7.7 percent on top of this in the 2027-2029 biennium. Given this, we believe it is a mistake to enact, as proposed last week, billions of dollars of additional tax increases with the apparent goal of growing tax revenue by almost 15 percent in the next two years alone.”The letter also suggested that tech jobs would leave the state as a result of such a package, and that it is 30% less expensive to employ a software engineer in Vancouver, Canada than in the Puget Sound region and that jobs moved to the Eastside from Seattle when the city started the “Jumpstart” payroll tax.The letter was also signed by the presidents of the Seattle and Bellevue Chambers, as well as the presidents of the Association of Washington Business and the president of the Washington Roundtable.“We are asking the legislature to think again,” said Microsoft President Brad Smith in a new interview with KOMO News. “It would make it harder to keep jobs in this state or create new jobs. The wealth tax, in our view, would cause people to leave the state. It would undermine entrepreneurship. It would discourage people from starting new companies in Washington state, it would be bad for the economy.”Thirteen countries across Europe adopted precisely this type of tax in the 1980s, and almost all of them ended up abolishing it because they all had the same experience,” Smith said in reference to the wealth tax. “This type of tax across Europe destroyed jobs.””We can’t ignore economics, and even in Seattle, Amazon has fewer jobs today than when that tax, that first payroll tax, was enacted, 10,000 fewer jobs, while in Bellevue, Amazon has added 25,000 jobs,” Smith added. “I think the economics would make virtually inevitable the transfer of some jobs out of Washington State to Idaho, to British Columbia, to other states in the United States, that is what the experience in Europe showed there.””It is cheaper to employ a software developer in Vancouver, and part of it is the exchange rate,” Smith said. “There’s other factors as well, but it’s why, when you go to Vancouver, the engineering population has really skyrocketed this decade, and you see not only Microsoft, but you see, Amazon, you see Apple, you see Zillow, you see a whole host of startups expanding jobs in Vancouver, and it’s great for Vancouver. It’s great for our entire region, but it is a reminder of economics at work,”“I am optimistic that if we all lean in together, we can find a sensible path,” Smith said.On Tuesday, Ferguson questioned the legality of any spending package that includes a wealth tax.Senate and House Democrats said such a bill would raise $4 billion and help close what Ferguson calls a $16 billion spending gap.Critics have suggested the gap was created by overspending over the last few budget cycles, given that revenues continue to remain strong. Ferguson did not directly answer questions about whether he would consider the payroll tax.