Heather Andrews and Pam Furr: The Evergreen State’s legacy of entrepreneurship and innovation is fleeing

By Heather Andrews and Pam Furr

Washington state once was a magnet for entrepreneurs and business owners, who chose to grow roots in the Evergreen State because of its strong, business-friendly economy. Companies including Microsoft, Amazon, Boeing, and Starbucks started here and set out to reshape the global economy.

Simply put, Washington’s entrepreneurship was the Energizer Bunny that kept the West Coast’s economy going. Startups were drawn here by a business climate that rewarded risk-taking, prized innovation, and kept government out of the way. But our state’s leadership has put that reputation at risk.

In March, Washington’s legislature passed, and Gov. Ferguson signed, a 9.9% income tax on households earning more than $1 million. Washingtonians voiced their opposition to the tax, but lawmakers still decided to push ahead. And to make matters worse, when citizens tried to put the measure before voters, the Washington Supreme Court unanimously blocked the referendum, ruling that tax measures are shielded from public challenge.

Let that sink in. A brand-new income tax, imposed for the first time in state history, and Washingtonians won’t even get a vote on it.

Supporters argued that this tax would only hit the wealthy and insisted that it would not cause businesses to leave, but the exodus has already begun. On the same day the income tax was passed, Starbucks CEO Howard Schultz announced that he and his wife would be moving to Florida. A few weeks later, the Seattle-based company announced plans to relocate its headquarters in Nashville.

There are deep concerns, however, about Starbucks’ targeted place of residency. The people of Tennessee are troubled by the trend of coastal corporate giants parachuting in, bringing out of state employees instead of hiring local, and demanding a corporate handout of $30 million in the form of a Fast Track Grant.

Tennessee is already one of the best places in America to do business. Why are taxpayers being asked to subsidize one of the largest corporations in the world? The free market works best when businesses succeed based on innovation, value and consumer choice, not based on who can negotiate the best deal with the government.

But Starbucks isn’t alone. The number of businesses weighing a move out of Washington nearly doubled after the millionaires tax proposal was introduced. Nearly one in five businesses are considering leaving the state, and 55% of business leaders are considering moving their personal residence elsewhere. Who can blame them? Why absorb increasing taxes when you can move to a state that actively wants your business, competes for your presence, and lets you keep more of what you earn?

Washington state can learn a thing or two from Tennessee. There is a reason businesses are flocking there. Competition between the states is a good thing and should be fostered to avoid the erosion of local, individual entrepreneurial spirit, while big corporations with little regard for the taxpayers help themselves to another cup of corporate welfare.

Olympia’s response to every fiscal crisis has been the same: spend more, tax more, repeat. If this cycle continues, Washington will lose more than just companies like Starbucks; it will lose the very economic foundation that makes everything else possible.

The silver lining is that this problem in Washington is self-inflicted and can be reversed. As businesses continue to flee the state, hopefully lawmakers will finally recognize that you can’t tax your way to prosperity. Otherwise, the Evergreen State’s legacy of entrepreneurship and innovation will soon only be remembered as something it taxed away.

Heather Andrews, of South Jordan, Utah, is the Western Regional Director for Americans for Prosperity. Pam Furr, of Nashville, Tennessee, is the Grassroots Engagement Director for Americans for Prosperity-Tennessee.