SEATTLE, Wash., — As layoffs continue to sweep through the Seattle-area tech sector, Microsoft President Brad Smith is issuing a stark warning: Washington’s increasingly aggressive tax policies could accelerate the loss of high-paying jobs and weaken one of the strongest economies in the country.
In an interview with Bloomberg, Smith cautioned that the state’s expanding tax burden risks “devastating” Washington’s economic engine if lawmakers continue targeting major employers.
“If the state’s tax burden becomes prohibitive, then every company will reconsider where they put jobs,” Smith said, comparing the gradual loss of investment to “air leaking out of a balloon rather than the balloon popping.”
Tech Layoffs Intensify Concerns
Washington’s job market is already under strain. This year alone:
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Microsoft has laid off more than 3,200 workers in the region
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Amazon cut 2,300
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Meta, Oracle, and Salesforce trimmed hundreds more
At the same time, Microsoft’s Vancouver, B.C. campus has more than doubled in size since 2020. Smith signaled that expansion there may accelerate if Washington raises taxes further—or if federal H-1B visa fees climb to the proposed $100,000 per application.
“You don’t have to look far to find Vancouver,” he remarked, suggesting the company is already shifting investment away from Redmond.
State Leaders Push Ahead With New Taxes
Democrats led by Governor Bob Ferguson have raised taxes by a record $12.2 billion over four years, yet the latest state forecast shows a $1.2 billion budget shortfall. Rather than trimming spending, lawmakers are pursuing additional revenue through:
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A new payroll tax targeted at large employers
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A statewide wealth tax
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Expanded business taxes
The payroll tax resembles Seattle’s former “head tax,” which mainly impacted ten of the city’s largest companies and contributed to Amazon relocating thousands of jobs to Bellevue.
Incoming Seattle Mayor Katie Wilson has called for further corporate levies, citing affordability concerns—despite a growing private-sector pullback.
Economic Ripple Effects Spread
Economists say Washington’s tax structure—now including sales, property, business taxes, a new capital gains tax, and Ferguson’s rent control law—is creating what some describe as a “chilling effect” on investment.
Developers report that rent control is already slowing housing starts, while construction revenue—previously one of Washington’s fastest-growing sectors—has dropped sharply.
Political Blame Game Continues
Despite the mounting budget deficit and business pushback, Ferguson has blamed federal policy and former President Donald Trump for Washington’s financial struggles—an explanation many economists dispute.
As state leaders continue to debate new tax proposals, Smith’s warning adds fresh pressure to a growing conversation about Washington’s competitiveness and the future of its tech-driven economy.