Don't Bite The Hand That Feeds You

Few places in the United States (or the world) have prospered in the way that Seattle and the state of Washington have over the last 40 years.

Three gigantic corporations that are integral to almost everyone's daily lives were founded there.

Microsoft.

Starbucks.

Amazon.

Washington has the third highest GDP per capita of any state in the union only trailing New York and Massachusetts. 

Of course, nothing comes close to the District of Columbia on that score.

Almost all of it fueled by our tax dollars!

Real per capita GDP by state
Source: Statista.com

Real median income (2023$) in the state increased from $61,200 in 1985 to $97,500 in 2024---almost 60% over and above inflation.

A major factor that contributed to Washington's growth was the fact that the state had no income tax.

Howard Schultz and Jeff Bezos both relocated from New York to Washington to begin their entrepreneurial pursuits motivated in part by that no state income tax policy.

The lack of a state income tax has hardly hampered Washington's ability to generate revenues over the years.

In 1985, the state had $4.3 billion in annual revenues from state and local taxes.

In 2025, those tax revenues had grown to $41.6 billion.

However, it does not seem to matter how much money government collects.

They always need more.

That is particularly true in a liberal state like Washington.

Washington has not had a Republican governor since 1985.

Republicans have not been in control of both houses of the state legislature since 1996.

In 2021, the Democrats in Washington passed a law that taxed capital gains of over $250,000 at 7%.

Last year that was increased to 9.9% for capital gains over $1 million.

This week the Washington House approved an income tax of 9.9% on those with adjusted household incomes of more than $1 million  annually.

Source: https://washingtonstatestandard.com/2026/03/10/with-marathon-debate-and-heated-vote-wa-house-advances-income-tax/

This is in a state which voters have rejected income tax proposals 10 times in the last 90 years. 

An income tax was last rejected by voters in 2010 by an overwhelming margin of 64%-36%.

The need to obtain voter approval to implement an income tax in the past was based on previous rulings of the Supreme Court of Washington that a graduated state income tax was unconstitutional.

This is due to a provision in the state constitution that states that all property must be taxed uniformly.

The Court has ruled that income is property and therefore a graduated, progressive income tax that does not tax everyone is unconstitutional.

The capital gains tax enacted in 2021 was upheld because the Court ruled that it was an excise tax involving the privilege of selling selling or transferring a capital asset rather on the property or asset itself.

The Court ruled that selling a capital asset was a "voluntary" act.

The Democrats was emboldened to pursue the income tax legislatively, and bypass the voting public, with the hope that a liberal Supreme Court will overturn the prior precedent that goes back almost 100 years.

Will that Court also now hold that earning income is "voluntary"?

In the meantime, Jeff Bezos and Howard Schultz have seen enough and have abandoned the state they moved to in order to make their fortunes.

Bezos left the state for tax-free Florida in 2023 after the capital gains tax was enacted.

Schultz (coincidentally?) announced on LinkedIn this week that he has also moved to Florida.

Bill Gates is apparently still making Washington his principal residence for now but he has multiple homes and it would not require much for him to change his tax domicile.

What is particularly interesting in all of this is that Bezos, Schultz and Gates have all been large contributors to Democrats in both the state and national elections over the years.

You have to wonder if they have had any second thoughts about that?

There is also an old idiom that Democrats in the state might want to think about.

"Don't bite the hand that feeds you."

Washington became one of the wealthiest states in the union over the last 40 years because of entrepreneurs who started businesses in the state that created hundreds of thousands of jobs and billions of dollars in tax revenues to Washington.

Their reward is for the state to take a massive bite out of their income and success?

You have to believe that there will also be a lot fewer entrepreneurs willing to take the risk of establishing new businesses in the state going forward.

What is also interesting is to see the divergence in state income tax rates across the nation over the last 25 years.

21 states (most being red states) have lowered state income tax rates.

6 states (including Washington if the new law is enacted) have increased income tax rates.

All six are Democrat led--D.C, Maryland, Massachusetts, New Mexico, New York and Washington.

Credit: https://x.com/JaredWalczak/status/2031738823512641688

Many states have accepted the fact that it is not wise to bite the hand that feeds you.

This has not sunk in for leftists in Washington and elsewhere.

They apparently will not be content until they take a bite out of everyone and everything.

Even if it ends up devouring them in the process when there is no one left to pay the bills.