May 8, 2026
Seattle Mayor Katie Wilson is facing backlash after laughing off concerns that higher taxes could drive wealthy residents out of Washington state.
In March, Washington adopted a so-called millionaire's tax of 9.9% (1) on earnings over $1 million, set to take effect in 2028.
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At a Seattle University event in April, Wilson commented, "I think the claims that millionaires are going to leave our state are, like, super overblown and if, you know, the ones that leave, like 'bye'" (2).
On a recent Fox Business episode of The Big Money Show, a co-host noted that the "flippant nature" of the mayor's remarks risks making a potentially serious issue seem trivial (3).
High earners on the move?
Washington's 7% capital gains tax on earnings from $278,000 (initially $250,000) and up (now 9.9% for earnings above $1 million), enacted in 2021, (4) marked a policy shift in what is one of the few states without a personal or corporate income (5) tax. The millionaire tax raises the stakes even further, and the Washington Supreme Court has ruled that it can't be challenged (6) by voter referendum.
But are fears of a tax-fueled millionaire exodus from higher-tax states an exaggeration, or is there real movement?
Federal data suggests movement is already underway in some states. An analysis from the Tax Foundation found that no-income-tax states continue to see net population gains, while some higher-tax jurisdictions are experiencing outflows (7).
The data shows taxpayers, and their income, moving out of states including California and New York to lower-tax states such as Florida and Texas. Washington state still has no traditional income tax for most people, but a millionaire's tax could give some wealthier residents a reason to reconsider where they want to live.
U.S. Census Bureau data also shows that population growth has been concentrated in lower-tax Southern states such as Texas, Florida and the Carolinas (15).
However, economists say taxes are only one piece of the migration puzzle. Brookings Institution research finds Americans decide where to live based on a much wider mix including housing affordability, job opportunities, climate pressures and overall quality of life (8).
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Tone fuels the backlash
The backlash against Seattle's mayor is about policy, but it also involves the potential perception of her flippant attitude. The Fox Business critics suggested that Wilson is sending a message to the wealthy of, "Don't let the door hit you on the way out," and that casual attitude could alienate not only millionaires, but also other business owners and investors who are weighing where to live and grow (9).
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The commentators argued that tone matters as much as tax rates, especially in a competitive landscape in which states are actively trying to attract both capital and talent, with the possibility of having huge corporations leave.
And Seattle Times (11) columnist Danny Westneat wrote, "The gaffes are becoming a pattern for Seattle's new mayor." His column quotes former Washington state legislator Reuven Carlyle, a Democrat, who said, "The language matters. Rhetoric matters. You're going to wave goodbye to your hometown entrepreneurs? We can't pretend that that rhetoric doesn't have a serious impact."
Wilson's remarks were part of an answer to a question from a student about Starbucks, a company with deep roots in Seattle, announcing in April that they would be investing $100 million in a corporate hub in Nashville, bringing roughly 2,000 jobs (12) to the city. While the company has not linked the move to tax policy, and their main headquarters will remain in Seattle, some policy experts have noted that the city's taxes, including its JumpStart payroll tax (13), may have played a role.
"Bare minimum they are going to save $250 million over the course of that 23-year lease in Nashville than they would've had to stay here in Seattle," Washington Policy Center's Ryan Frost told MSN (14).
Whether you're an investor, entrepreneur or homeowner, staying in the loop on policy can help you anticipate shifts in local economies and make smarter financial decisions. As Washington navigates its next steps, the state is still faced with the reality that in an era of increasing mobility, policy decisions can play a decisive role in where the people holding the money bags choose to go.
Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
Morgan Lewis (1); Seattle Channel (2); Fox Business (3),(9); Washington State Department of Revenue (4),(5); The Wall Street Journal (6); Tax Foundation (7); Brookings Institution (8); CNBC (10); Seattle Times (11); Starbucks (12); MyNorthwest (13); MSN (14); Reuters (15)
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Freelance writer with an economic development and consulting background.
