Washington state spent decades as one of the last tax-free havens for entrepreneurs and tech innovators. No state income tax. Build your company, keep your money, reinvest it however you want. Then the Democrats got greedy, passed a 9.9% income tax on anyone making over $1 million, and now the U-Hauls are backed up at the Idaho border.

Shocking absolutely nobody who has ever opened an economics textbook.

Gov. Bob Ferguson signed HB 6346 into law in March 2026, slapping a 9.9% levy on annual income exceeding $1 million. The tax officially kicks in on January 1, 2028, with the first payments due in 2029. But the exodus isn't waiting for the effective date. It's already happening — and it's happening fast.

Jesse Proudman, the founder and CTO of Venice.ai, a privacy-focused generative AI startup, put it bluntly in an interview with The Center Square: "Everybody is leaving." Proudman said Washington has "increasingly villainized" business success and entrepreneurial spirit — the very thing that made the state an economic powerhouse. He called it a "dramatic" shift from the state he once considered a "startup sanctuary."

"I don't really want to move," Proudman said, "but I sort of had the realization that there were two paths. Either I just quietly packed up and left, like everybody else is doing, or I became vocal." He's relocating his life and business interests to Austin, Texas. Good luck getting him back.

And Proudman isn't some outlier screaming into the void. The numbers are brutal. An AWB survey from April found that 24% of Washington employers are actively looking to move their businesses out of the state. Let that sink in — one in four. Another survey found 44% of business leaders are considering moving their personal residences. Washington businesses are now more than twice as likely to expand outside the state than within it.

Starbucks — yes, the company that practically invented Seattle's modern economy — is shifting 2,000 corporate jobs to Nashville, Tennessee. Nashville. A state with zero personal income tax. You can't make this stuff up.

But don't worry, State Sen. Jamie Pedersen has it all figured out. The Senate Majority Leader and the bill's primary sponsor, representing Seattle's 43rd District, dismissed the entire exodus as a fantasy. "The reality is the millionaire tax is not likely to result in businesses leaving," Pedersen said. He claimed there is "no evidence" that high earners will migrate to lower-tax states like Florida or Texas.

No evidence. Except for the 24% of employers packing boxes. And Starbucks relocating 2,000 jobs. And Jesse Proudman heading to Austin. And every other data point that exists in reality.

Pedersen even tipped his hand in an internal communication, admitting he'd "like to force the Washington State Supreme Court to reconsider its case law that considers income to be property" — because the state constitution caps uniform tax rates at 1%. So this isn't just about one tax. It's about blowing a hole in the constitutional guardrail so they can tax everything that moves.

We've seen this movie in California. We've seen it in New York. We've seen it in Illinois. The script never changes: tax the rich, watch the rich leave, then wonder why the revenue projections come in short and the state budget has a crater in it. Washington just bought the same ticket.

The entrepreneurs built that state. And the Democrats just told them they're not welcome anymore. Texas, Tennessee, and Florida are rolling out the red carpet. Washington is rolling out the tax bill.

Good luck funding your budget with the people who stayed.