Olympia, Wash. — Washington is experiencing a concerning outflow of wealthy residents and high-earning professionals, raising questions about the long-term stability of the state’s economic engine. New data and high-profile departures suggest that tax policies and regulatory burdens may be pushing some of the state’s most successful innovators and entrepreneurs to relocate elsewhere.
A 2024 SmartAsset analysis of IRS migration data found that Washington lost a net 222 high-earning millennial households—those making over $200,000—between 2021 and 2022, the eighth-highest loss in the country. A follow-up 2025 report revealed that affluent Gen Z residents are leaving at an even faster rate, placing Washington second only to Illinois in net outflows of young high-earning professionals.
Economists say the departures align with growing concerns among businesses and investors about the state’s tax environment. Washington’s 2022 capital gains tax, along with new proposals for a wealth tax and income tax, has heightened anxiety among high-income households and start-up founders.
Several notable business leaders have also made headlines for moving to states with no income tax. In 2023, a prominent technology founder relocated to Florida, citing the state’s tax structure as a key factor. Texas has also become a magnet, drawing high-profile executives seeking a more favorable regulatory landscape. Meanwhile, Nevada real estate agents report rising demand from Washington residents purchasing multimillion-dollar homes to take advantage of the state’s zero income and capital gains taxes.
A March 2025 Bloomberg report described a surge in luxury home purchases in the Las Vegas Valley by former Seattle-area tech professionals. Some executives from leading Washington-based technology firms have quietly moved their families and assets to Nevada, a trend that industry watchers say could have ripple effects on the region’s broader economic health.
At a recent GeekWire event, a top executive warned that the growing outflow of high earners could cause “lasting damage” to the state’s innovation sector, potentially raising prices and reducing job growth if the trend accelerates.
Despite these concerns, some progressive analysts point to growth in the number of Washington residents with significant wealth. A report from the Institute for Policy Studies found that the state’s millionaire population rose from 463,000 in 2022 to 681,000 in 2024, a 46.9% increase. However, critics argue that much of this growth stems from rising stock values rather than retention of top wealth creators.
The capital gains tax brought in $1.2 billion, but some economists question whether the revenue gain offsets the potential long-term economic loss if more high-income residents leave the state. Wealthy households tend to generate substantial economic activity through home construction, entrepreneurship, investments, and philanthropy—areas that could be strained if the trend continues.
Fiscal analysts warn that, unless policymakers re-evaluate the state’s tax priorities, Washington could face an erosion of its future tax base. Business advocates are calling for the repeal of the capital gains tax, abandonment of the wealth tax proposals, and regulatory reforms aimed at ensuring the state remains competitive.
As legislative debates continue, Washington must decide whether its current tax approach supports long-term prosperity—or drives it away.