Starbucks billionaire Howard Schultz exits Washington as lawmakers pass 9.9% millionaires tax
Washington lawmakers have approved a sweeping new tax on high earners, marking a historic shift for a state long known for having no personal income tax; as former CEO of Starbucks, Howard Schultz revealed he is relocating to Florida. The billionaire ex-CEO of Starbucks announced the move as the state advanced a 9.9% levy on annual income above $1 million, a policy supporters say will make the tax system fairer but critics warn could drive wealthy residents and businesses away.
Schultz is not the first billionaire to leave Washington.
In late 2023, Jeff Bezos announced his departure from Seattle; his home of nearly 30 years, to relocate to Miami, Florida. Publicly, Bezos attributed the move to personal logistics, citing a desire to be closer to his parents and the Florida-based operations of Blue Origin. However, the timing was conspicuous; it occurred shortly after the Washington State Supreme Court upheld a 7% capital gains tax. By shifting his primary residence to Florida; a state with no income or capital gains tax; Bezos effectively shielded his massive stock liquidations from Washington’s reaching hand.
Lawmakers approve historic tax on income above $1 million
The so-called “millionaires tax,” formally known as Senate Bill 6346, imposes a 9.9% levy on taxable personal income exceeding $1 million annually. The legislation cleared the Washington State House after more than 24 hours of debate and is set to take effect on Jan. 1, 2028, with the first payments due in 2029.
The policy represents the first major push in decades by Washington lawmakers to implement a personal income tax aimed at high-income residents.
Backers of the bill argue the tax will help rebalance a system that relies heavily on sales, property, and business taxes; levies that tend to fall more heavily on lower-income households.
“The Millionaires’ Tax will apply to less than one half of one percent of Washingtonians, but make life more affordable for millions. I look forward to signing it,” Ferguson said.
Supporters also highlight new benefits for low-income families and small businesses as part of the broader package.
Revenue projections could reach billions annually
Although a final fiscal analysis has not yet been released, lawmakers estimate the tax could generate between $3.5 billion and $4 billion per year once collections begin.
Some of that revenue is expected to fund child care programs, public education, early learning initiatives, and health care services, while also eliminating sales taxes on certain hygiene products.
The policy is also viewed as a potential tool to help address a roughly $2 billion near-term budget gap facing the state.
High-profile business leaders raise concerns
Critics warn the measure could undermine Washington’s reputation as a business-friendly environment. Those concerns gained national attention after former Howard Schultz, billionaire ex-CEO of Starbucks, disclosed he and his wife were relocating to Miami.
While Schultz framed the move as a desire to be closer to family, he emphasized his “hope that Washington will remain a place for business and entrepreneurship to thrive.”
His family office will relocate to Florida, though his foundation will remain in Seattle.
Business advocates say adopting an income tax could weaken one of Washington’s longstanding competitive advantages.
Kris Johnson, president of the Association of Washington Business, described the policy as a “seismic shift” in the state’s tax structure, warning it could discourage companies from starting, expanding, or relocating to the region.
Washington is already considered expensive for both families and employers, he added.
Employers’ coalition urges further tax reform
Other industry voices struck a more measured tone. Rachel Smith, president of the Washington Roundtable, credited lawmakers for scaling back other tax increases and repealing an expanded sales tax on services passed last year.
She stressed that broader changes are still needed to improve the state’s “economic competitiveness” and ensure “long-term budget sustainability.”
“As we have said before, we see this as the beginning — not the end — of real, earnest work to implement the changes Washington needs,” Smith said. “It is imperative that this work happen quickly.”
Democrats say reform targets outdated tax structure
State House Majority Leader Joe Fitzgibbon said the legislation addresses what he called a “grossly outdated” tax system.
“It has been a long journey here to this moment, not just the over 24 hours that we’ve spent on this floor debating this proposal, but the 93 years that Washingtonians have struggled with a grossly outdated tax structure that falls by far the heaviest on the lowest income,” Fitzgibbon said.
Supporters argue that fewer than 1% of households; roughly 21,000 to 30,000 taxpayers; would be affected.
Republicans warn of economic fallout and tax expansion
Republican lawmakers unanimously opposed the measure and attempted to amend it to require voter approval.
Representative Travis Couture, the ranking Republican on the House Appropriations Committee, said: “If record revenue couldn’t balance the budget, a ‘millionaire’ income tax won’t either. This is a spending problem, not a revenue problem.”
Republican lawmakers have also expressed concern that the measure could negatively impact small businesses and encourage wealthy residents to relocate to lower-tax states.
Senate Republican budget leader Chris Gildon called it “the largest tax increase in our state’s history,” while GOP leader John Braun argued the proposal could be expanded into a broader income tax in the future.
Legal challenges and ballot fights likely ahead
The measure is widely expected to face court challenges, as Washington’s constitution has historically been interpreted as prohibiting graduated income taxes.
In addition, voters in the state have rejected income tax proposals 10 times, most recently in 2010; raising the prospect of a ballot initiative to overturn the law.
How Washington compares with other states
If implemented, Washington would join jurisdictions such as California, New York, and New Jersey that already levy higher tax rates on million-dollar incomes.
However, it would still stand apart from states like Texas and Nevada, which continue to rely on sales and property taxes rather than personal income taxes.
Broader national debate over taxing the wealthy
Washington’s move comes as lawmakers across the country explore new ways to raise revenue amid mounting fiscal pressures. At the federal level, proposals from figures such as Bernie Sanders and Ro Khanna to tax ultra-wealthy Americans signal a growing national conversation about how to fund public services while maintaining economic competitiveness.
For now, Washington’s millionaires tax represents one of the most significant test cases yet; with its economic, legal, and political impacts likely to be closely watched in the years ahead.
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14 essential strategies to maximize your Social Security and avoid costly mistakes
Social Security is a vital lifeline for many seniors, providing crucial income support during retirement. With inflation at its highest in four decades, Social Security’s inflation-adjusted benefits offer protection against rising costs.
Rising interest rates have disrupted many retirement portfolios, causing bond fund values to plummet. In this volatile financial landscape, Social Security can stabilize a typical stock-bond retirement portfolio. By implementing smart strategies, retirees can maximize their Social Security benefits and ensure a more secure financial future.
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Deciding when to claim Social Security is often about maximizing your benefit. Financial planners usually advise delaying your claim for as long as possible to secure the highest monthly payment. Your benefit is based on your lifetime earnings, with a full payout available at your full retirement age (FRA), which is currently between 66 and 67 depending on your birth year. Claiming before FRA results in a permanent reduction in your monthly benefit, while waiting beyond FRA leads to a permanent increase. However, the decision isn’t solely about maximizing the monthly check. Personal factors such as health, family circumstances, and financial needs can play a significant role in determining the right time to claim.
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John Dealbreuin came from a third world country to the US with only $1,000 not knowing anyone; guided by an immigrant dream. In 12 years, he achieved his retirement number.
He started Financial Freedom Countdown to help everyone think differently about their financial challenges and live their best lives. John resides in the San Francisco Bay Area enjoying nature trails and weight training.
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