Starbucks founder leaves Washington state with millionaire tax rattling the rich

Washington state lawmakers had been debating a proposed “millionaire’s tax” for 23 hours straight when Starbucks Corp. founder Howard Schultz said he was leaving the state to move to Miami.

Schultz said the move after more than four decades was partly due to family reasons now that he’s retired, and he didn’t mention taxes in the LinkedIn post announcing his departure. But he alluded to the worries sweeping the Seattle business community as the state’s first income levy nears enactment.

“It is our hope that Washington will remain a place for business and entrepreneurship to thrive, creating essential opportunity for those in Seattle and the surrounding areas,” he said.

Opponents of the new tax regime are warning that more people will leave the region if Schultz’s hope isn’t realized. Joe Fain, a former Republican state senator who now leads the Chamber of Commerce in Bellevue, across Lake Washington from Seattle, said the tax shift coming out of state capital Olympia “punishes innovation and pushes entrepreneurs elsewhere.”

“We’re making very poor choices that are going to have very lasting repercussions,” he said in an interview, expanding on an earlier statement in which he noted that rising taxes in Seattle had sparked more investment in Bellevue.

“If Olympia continues down this path, the next moves won’t be across the lake - they’ll be across state lines,” he said.

Governor Bob Ferguson, a Democrat, said the tax on high incomes will affect “less than one half of one percent of Washingtonians, but make life more affordable for millions.” He has said he’ll sign the bill passed by the Democratic-controlled House of Representatives on Tuesday and the Senate on Wednesday.

Washington ranked sixth among the states in total residents gained last year, reflecting in part a robust business scene that has fueled economic growth. Over the past century, the state has produced some of the world’s most recognized companies - not just Starbucks but Boeing, Costco, Microsoft, Zillow and Amazon.com. At the same time, however, soaring wealth has priced many families out of the region.

Responding in part to affordability concerns, Democrats have pushed through a series of tax increases over the past five years, saying the measures will pay for public services to ease inequality and the high cost of living.

“We have a broken, upside-down, hundred-year old tax system that is just not adequate to meet the needs of our state in the 21st century,” Jamie Pedersen, the Democrat who sponsored the bill in the Washington Senate, said last month. “Our tax system ought to be restructured.”

Skeptics, including many of the Republicans who offered income-tax amendments through Monday night and into Tuesday evening, warn that the sudden accumulation of new levies will drive away wealthy individuals and job-creating companies.

“We know that you’ve heard it in this debate tonight about all the companies that have found success here,” Republican Representative Chris Corry said on the House floor. “The question is, are they going to innovate in Washington or they going to innovate in Tennessee or Florida or Georgia where the tax rates and the weather are a lot more favorable?”

Starbucks said last week that it will open a new office in Tennessee, adding jobs and offering Seattle-based employees on affected teams the opportunity to move as it targets growth in the South and Northeast. While the company emphasized its commitment to Seattle, it also said it would “evaluate whether it makes sense to add additional teams and roles in Nashville over time,” according to an internal memo viewed by Bloomberg.

Schultz’s LinkedIn post referenced his story of arriving in the Seattle area in a small car filled with hopes, dreams and entrepreneurial energy. His foundation will stay in Seattle while his family office moves to Miami. Employees of those institutions didn’t respond to requests for comment.

Jeff Bezos similarly announced his 2023 move to Miami in an Instagram post around the time that Washington’s Supreme Court allowed a capital gains tax to stand. Bezos included a grainy video of the garage in Bellevue where he started Amazon.

Economic activity across the Puget Sound since last year has been uneven - an unnerving prospect for a region accustomed to steady growth. The four counties within commuting distance of Seattle lost nearly 13,000 jobs in 2025, the region’s first employment downturn since 2009 excluding the pandemic, according to the Puget Sound Regional Council.

Speaking at an event Wednesday night, Jon Scholes, head of the Downtown Seattle Association, said job losses in Seattle have contributed to a 32% office vacancy rate that caused the city’s 10 most valuable buildings to lose more than half their value over the last six years. Scholes said that shifts more of the property tax burden to smaller owners and renters.

“There’s nothing progressive about that,” Scholes said. “We need to accept the facts and the reality of where we sit today and the choices that employers have.”

There are additional taxes that failed to advance in this year’s short legislative session but remain under discussion.

One would be the country’s first wealth tax on investment gains on paper that haven’t been realized. Another would change the tax treatment of qualified small business stock - a measure vehemently opposed by tech founders and venture capitalists, who testified that it would decimate the region’s startup ecosystem.

“It seems to be a historic legislative session - from a tax perspective - every year now,” said Aaron Johnson, an attorney at Ballard Spahr. “We are undermining the approach that any prudent business would take in determining whether or not to remain in our state or to invest in our state.”