Former Washington Governor Christine Gregoire, a Democrat, publicly criticized her own party for enacting higher taxes and tax rates that she believes are driving small businesses and wealthy individuals out of the state [1]. Speaking at the Association of Washington Business 2026 Spring Summit on May 6, Gregoire specifically referenced the state's estate tax, which was previously raised to 35%, making it the highest in the country, tied with Hawaii at 20% before the increase. She noted that after backlash, a bill passed in April rolled the estate tax rate back to 20% [1].
Gregoire warned that such tax policies have significant consequences, including wealthy residents leaving the state, which in turn reduces capital gains tax revenue and philanthropic contributions. She questioned whether the legislature fully understands these impacts, stating, "Those people are not homeless. They will not pay. They're leaving. When they leave, they stop paying capital gains. When they leave, they stop giving significantly to philanthropy, which would otherwise be necessary by government" [1].
The state recently passed a new 9.9% tax on annual income exceeding $1 million for individuals or households. This 'millionaires' tax,' pushed through by the Democratic majority during the 2026 session, was signed in March 2026 but will not take effect until January 1, 2028, with the first payments due in 2029 [1]. Following the passage of this tax, Starbucks, which originated in Seattle, announced it would move 2,000 corporate jobs to a new regional headquarters in Nashville, Tennessee [1].
Gregoire also criticized Democratic state House members for lacking business experience and argued that the state does not have an income problem but a spending problem, suggesting that the accumulation of taxes and regulations undermines business predictability and growth [1]. The tax policy has also drawn criticism toward Seattle Mayor Katie Wilson for her dismissive stance on the potential exodus of millionaires from the state [1].
CONCLUSION
The passage of Washington's millionaires' tax has sparked significant criticism from former Governor Christine Gregoire and prompted a major corporate relocation by Starbucks. The developments highlight concerns about the state's tax policy potentially driving away high earners and businesses, raising questions about the long-term economic impact.