Socialist Seattle Pushes New Taxes as Starbucks Jobs Vanish

Ajouté : 2026-05-20

[00:00:00]And Seattle is a bad business decision.

[00:00:03]Washington state is a bad business decision.

[00:00:07]>> Well, former Starbucks CEO Howard Schulz called out Seattle Mayor Katie Wilson in an opinion piece he wrote for the Wall Street Journal in the op-ed te titled Seattle Turns Hostile to the great businesses it made. Schultz criticized the city's relationship with corporations saying Mayor Wilson quote has chosen to cast business as a foil rather than a partner. Her socialist rhetoric vilifies employers even while she continues to rely on them for revenue. One of Washington's iconic companies headquartered in Seattle now plans to open a major corporate office in Nashville. Today, Starbucks announced it will add thousands of jobs and invest millions in Tennessee. The big move brings bigger questions about what it means economically for Washington.

[00:00:53]This is uh a state that has become the envy of many states >> as Tennessee's Governor Bill Lee rolls out the red carpet for Starbucks.

[00:01:04]>> And we are extremely grateful for you, Brian, for your team.

[00:01:09]>> As Starbucks CEO Brian Nichols says the company will grow in Nashville, investing $und00 million and adding 2,000 new jobs.

[00:01:17]>> 2,000 jobs. that just by that number, that's one of the five biggest jobs announcements uh in the city of Nashville's history. The average salary for these 2,000 Starbucks jobs is going to be $125,000 a year. And that's well above what the medium household income is. This is what happens when a city taxes its way to the top, and its biggest companies start heading for the exit.

[00:01:40]Seattle, Washington, just shattered a 90-year barrier by passing the first income tax in state history. And the fallout is already showing up in layoff notices, empty office towers, and billionaires relocating to Florida.

[00:01:56]Not once in Washington state's entire existence has there been an income tax.

[00:02:01]Voters struck down income tax proposals 10 separate times since 1932, and courts killed every attempt that survived the ballot box. For close to a century, Washington stood as the place where high earners could build fortunes without surrendering a cut of their paycheck to the state. And that era ended on March 30th, 2026 when Governor Bob Ferguson signed Senate Bill 6346 into law. 9.9% on all household income above $1 million.

[00:02:34]That is what the new tax imposes with collection beginning January 1st, 2028.

[00:02:40]and first payments landing in April of 2029.

[00:02:44]Roughly 21,000 filers across the state will be affected according to the Department of Revenue, generating an estimated $3 billion per year. A full third of those filers live in just three legislative districts inside King County, which includes Seattle.

[00:03:02]None of this happened overnight. And that is where the story really begins.

[00:03:08]Seattle's transformation From tax haven to potentially the highest taxed metro area in America traces back more than a decade to a political shift that fundamentally changed the city. Kama Sant broke through in 2013. As the first openly socialist politician elected to Seattle's city council in modern history. Over the next 10 years, from 2014 through 2023, she used that District 3 seat to push through some of the most aggressive progressive policies anywhere in the country, including Seattle's $15 minimum wage in 2014.

[00:03:46]What Sant left behind when she stepped away at the end of 2023 May more than any single policy because the political culture she helped build now runs the city without her.

[00:03:59]She never sought reelection and today she is running for United States Congress as an independent in Washington's 9th district. The person carrying that torch now is Mayor Katie Wilson who took office on January 2nd, 2026 after edging out incumbent Bruce Harrell by just 18 votes.

[00:04:20]Axio Seattle called the 0.73% point margin the closest mayoral race in Seattle since 1906.

[00:04:29]Wilson, 43 years old at the time, had never held elected office, but she co-founded the Transit Writers Union back in 2011 and helped design the Jumpstart payroll tax. Her own description of her politics is quote a socialist and a progressive Democrat.

[00:04:46]And that's when the tax stacking accelerated. Under Wilson and the progressive council majority that arrived alongside her, Seattle has been layering one levy after another onto its largest employers.

[00:05:00]Jumpstart, the payroll expense tax passed in 2020, charges companies with more than $8.5 million in local payroll between 0.75 and 2.557%.

[00:05:14]About 500 employers pay it, but 70% of the revenue flows from just 10 firms.

[00:05:21]$360 million came in during 2024, which sounds like a lot until you realize that figure landed 46.8 million below forecast because Amazon had been quietly moving employees out of Seattle and into Belleview, just 5 miles to the east.

[00:05:40]More than 14,000 Amazon corporate workers have already made the jump with plans to reach 25,000.

[00:05:48]Seattle voters then approved Proposition 1A in February of 2025 by a margin of 63 to 37%.

[00:05:56]Imposing a 5% tax on every dollar an employer pays a Seattlebased worker above 1 million in compensation.

[00:06:05]The projected hall is about 53 million a year for social housing. Amazon, Microsoft, and the Seattle Metropolitan Chamber of Commerce poured more than $500,000 into defeating the measure, and it passed anyway.

[00:06:22]November of 2025 brought the Seattle Shield Initiative, a restructuring of the city's business and occupation tax.

[00:06:30]90% of Seattle businesses got a rate cut under the plan. While the largest 10%, those pulling in more than 5.7 million in gross receipts, saw their rates climb, generating roughly $90 million in new revenue.

[00:06:46]Now, stack every one of those taxes on top of the state's new 9.9% income tax.

[00:06:53]The Tax Foundation ran the numbers and landed on a combined top marginal rate of 18.0 037% for a high earning Seattle resident with stock-based compensation. That breaks down to the 9.9% state income tax plus Jumpstart at 2.557%.

[00:07:13]Plus Proposition 1A at 5% plus a 0.58% long-term care payroll tax, 18% combined. And according to the Tax Foundation, that is the highest rate in the entire United States, 22% above New York City. Business leaders responded in real time.

[00:07:36]Rachel Smith of the Seattle Metropolitan Chamber told reporters that uncertainty is the quote number one enemy for companies trying to plan ahead.

[00:07:46]Seattle Seahawks general manager John Schneider put it bluntly on Seattle Sports 710 a.m. in March of 2026, saying the millionaire's tax is quote going to sting from a recruiting standpoint.

[00:08:01]Downtown Seattle's office vacancy rate now sits above 30%. And the city shed approximately 13,000 jobs in 2025, the steepest non-pandemic drop since 2021.

[00:08:15]And then came the departure that turned heads more than any statistic could.

[00:08:20]Hours after the Washington State House passed the income tax bill 51 to 46 on March 11th, 2026, former Starbucks CEO Howard Schultz posted on LinkedIn that he and his wife were leaving Seattle after 44 years.

[00:08:39]A $44 million penthouse in Surfside, Florida became their new home, and Fortune magazine pegged Schultz's net worth at $6.6 billion. His parting words expressed hope that Washington would quote remain a place for business and entrepreneurship to thrive. Florida, of course, charges no state income tax.

[00:09:00]Schultz followed Jeff Bezos, who left Seattle for Miami back in 2023.

[00:09:06]That brings us to the company Schultz built from a single Seattle store into a global chain of more than 10,000 company operated locations across the United States. Starbucks is going through one of the most dramatic corporate restructuring in the country right now.

[00:09:22]And it is unfolding against exactly this backdrop of rising taxes and eroding confidence in Seattle's business climate.

[00:09:30]Seven consecutive quarters of declining same store sales had already weakened Starbucks before the tax debate reached its peak. The board ousted CEO Laxman Narisimhan in August of 2024 after just 17 months. And his replacement was Brian Nickel, the Chipotle executive who had engineered that company's recovery after a food safety crisis.

[00:09:53]Nicholls hiring package carried a total potential value of $113 million split across a $1.6 million salary, a $10 million cash signing bonus, and $75 million in equity replacement grants.

[00:10:11]$96 million is what he actually collected in his first four months alone.

[00:10:17]Newport Beach, California remains Nicholls home, not Seattle. His offer letter filed with the Securities and Exchange Commission spelled out that relocation was not required and Starbucks provided a private jet for the commute. A $250,000 annual cap on personal aircraft use originally applied, but the company eliminated that limit entirely in September of 2025, pointing to security concerns after the December 2024 murder of United Healthcare CEO Brian Thompson.

[00:10:52]What followed was round after round of cuts. February 24th, 2025 brought the first wave when Starbucks eliminated 1,100 corporate positions and closed several hundred unfilled openings.

[00:11:08]September 25th of that year brought a $1 billion restructuring that slashed 900 more non- retail jobs and shuttered 627 stores in the fourth quarter of fiscal 2025 with more than 90% of those closures in North America. Among the casualties was the Capitol Hill Reserve Roastery in Seattle, a flagship location that had operated for 11 years.

[00:11:35]March of 2026 delivered the Nashville announcement with Starbucks revealing plans to shift up to 2,000 jobs from Seattle to a new corporate office in Tennessee.

[00:11:45]My Northwest reported that figure represents more than half of Starbucks employees in the Seattle area, and Tennessee charges no state income tax.

[00:11:54]Another 300 corporate layoffs hit in May of 2026, including 252 from the Seattle Support Center. When you add it all together, more than 2,300 Washington-based positions have been eliminated since February of 2025, according to state workforce notification data.

[00:12:16]While the corporate side shrank, the labor side fought back.

[00:12:21]Starbucks Workers United, representing roughly 11,000 baristas at 667 unionized stores, launched the Red Cup Rebellion on November 13th, 2025, timing the open-ended strike to land on Starbucks annual Red Cup Day promotion. By December 4th, more than 3,800 baristas across 180 stores in 130 cities had walked off the job, according to the union's own count.

[00:12:50]131 days is how long that strike lasted before workers returned in late February 2026.

[00:12:58]They came back without a contract and bargaining picked up again in April, but as of today, no deal exists. Nickel told CBS Mornings in October 2025 that the union's demands had been quote unreasonable, adding that Starbucks offers quote the best benefits and the best wages in the industry at roughly $30 per hour in combined pay and benefits. The union fires back that starting barista pay sits at $15.25 per hour in most states and that many workers do not receive enough hours to qualify for those benefits.

[00:13:37]Alongside the layoffs and the labor fight, Starbucks has been peeling away the progressive corporate policies that once defined its brand. Shareholders voted 92% in March 2024 to strip a 7 12% DEI linked component from executive bonuses, replacing it with a general belonging metric.

[00:13:59]Nickel reversed the company's open door bathroom policy in January 2025, undoing a rule adopted in 2018 after two black men, Rashawn Nelson and Dante Robinson, were arrested at a Philadelphia Starbucks for sitting in the store without buying anything. An incident that had prompted more than 8,000 stores to close for racial bias training. By November 2025, the board went further and eliminated its environmental partner and community impact committee altogether. There was also the boycott which had already drained billions from the company's valuation. Back in October 2023, Starbucks Workers United posted a message on social media expressing quote solidarity with Palestine.

[00:14:49]40 minutes later, the post came down, but Starbucks Corporation still sued the union for trademark infringement, and the union counters sued for defamation.

[00:14:59]12 consecutive losing sessions followed with shares falling nearly 9%. The longest such streak since the company went public in 1992.

[00:15:09]Approximately 11 billion in market value vanished, though analysts pointed to multiple factors contributing to the slide, including a broader slowdown across the category. This is where both stories land in the same place. Seattle stacked tax upon tax until the Tax Foundation called it the highest combined marginal rate in the country at over 18%.

[00:15:32]Amazon moved more than 14,000 employees to Belleview. Starbucks is sending up to 2,000 jobs to Nashville. Howard Schultz left for Miami. 13,000 jobs disappeared from downtown Seattle in a single year.

[00:15:47]And more than 30% of its office space sits vacant.

[00:15:52]Legal resistance arrived quickly. A case called Perv. Washington landed on April 9th, 2026.

[00:16:00]Spearheaded by former state attorney general Rob McKenna. His argument hinges on the 1933 Cullatin Vervy's Chase precedent which has blocked every prior income tax attempt in Washington. McKenna's words were direct. Quote, "Washington's constitution is clear and the courts have been equally clear for nearly a century.

[00:16:24]Income is property and progressive income taxes are unconstitutional under existing law.

[00:16:31]Everything now rests on whether the Washington Supreme Court agrees.

[00:16:36]Upholding the tax locks.

[00:16:38]Seattle into the highest taxed metro designation in the country by a wide margin. While striking it down would add one more defeat to a 90-year legal fight that progressive lawmakers have never managed to win. The layoff notices have already been filed and the moving trucks have already left.

[00:16:58]Office towers that once housed thousands of workers now stand half empty. And the question hanging over Seattle is whether revenue from 21,000 millionaire tax filers can fill the gap left behind when companies, jobs, and founders decide that 18% is simply too steep a price.

[00:17:17]That is the BET Seattle just placed and the returns are already coming in.