A Seattle tech entrepreneur says Washington’s new income tax proposal is already pushing investors and founders to leave the state — and warns the exodus could accelerate as the policy takes effect.
During an interview on The Ari Hoffman Show on Talk Radio 570 KVI, longtime Seattle entrepreneur Jesse Proudman said the reaction from the tech community to the state’s newly approved 9.9% tax on income above $1 million has been swift.
“Everybody’s on their way out,” Proudman said, describing what he called a growing departure of founders, investors, and high-earning tech professionals from Washington.
The tax, passed by Senate Democrats earlier this year under SB 6346, is commonly described by supporters as a “millionaire’s tax.” Critics argue it effectively establishes a state income tax for the first time in modern Washington history.
Proudman said he began noticing the issue gaining urgency after conversations with other entrepreneurs in Seattle’s startup ecosystem.
“A close friend of mine… started screaming in my ear a couple weeks ago,” Proudman said, referring to Foundations workspace founder Aviel Ginsberg. “That was the first realization that something is happening here, and it’s moving quite quickly.”
He said the response to a recent article he wrote about the tax revealed just how widespread the concern has become.
“What I came to realize is that so many people that I know and respect in the community — they’ve already left,” Proudman said. “Or they’re planning on it.”
According to Proudman, the timing of the tax could not be worse for Washington’s tech economy, which is already undergoing disruption due to the rapid rise of artificial intelligence.
“We’ve got this wave of transformation happening with AI and how that’s going to impact the job ecosystem,” he said. “And on top of that now, you’ve got this income tax affecting the highest earners in the state.”
Because those individuals are highly mobile, Proudman warned they may simply relocate rather than absorb the new tax.
“These people are mobile,” he said. “People aren’t going to sit here and just take this.”
Several destinations are already emerging as popular alternatives for departing tech leaders, Proudman said, including Austin, Miami, Nashville, and Las Vegas — cities located in states without personal income taxes.
The warning comes as broader economic indicators show strain in Washington’s tech-heavy economy. Recent layoffs across major employers — including Microsoft, Amazon, and Meta — have contributed to rising unemployment in the Puget Sound region, even as the national labor market improves.
Business confidence is also weakening. A recent Association of Washington Business survey found 44% of business leaders are considering moving their personal residence out of Washington, with taxes cited as the top concern.
Proudman said his goal isn’t necessarily to leave the state, but to push back against policies he believes could damage its economic foundation.
“I grew up here,” he said. “I love Washington. I want to stay here. But I don’t want to see the consequences of this play out across the entire state.”
For Proudman and others in Seattle’s tech community, the fight over the income tax is just beginning.
