OLYMPIA, Wash. — Washington state, long celebrated as a hub for innovation and entrepreneurial success, is confronting a growing concern: a steady outflow of wealthy residents and high-earning professionals. Analysts point to the state’s tax structure—especially new capital gains taxes and proposals for future wealth taxes—as a driving force behind the migration.
Recent data suggests the trend is accelerating. A 2024 SmartAsset analysis of IRS migration data revealed that Washington lost a net 222 high-earning millennial households—those making over $200,000 annually—between 2021 and 2022, ranking the state eighth in the nation for out-migration among affluent millennials. A subsequent 2025 report found that the state is also losing wealthy Gen Z professionals, second only to Illinois.
Economists warn that although Washington’s overall millionaire population has grown—due partly to stock market gains—its highest-value residents may be departing.
High-profile departures underscore trend
Several relocations have attracted national attention:
-
Jeff Bezos moved to Florida in 2023, citing its lack of income tax.
-
Elon Musk, after moving Tesla’s headquarters to Texas in 2021, shifted his residence there as well.
-
Tech executives from Amazon and Microsoft have reportedly been buying luxury homes in Nevada, where neither income nor capital gains taxes apply.
A March 2025 Bloomberg report described a surge in multimillion-dollar home purchases around Las Vegas by former Seattle-area executives. At a GeekWire event, Microsoft President Brad Smith warned the trend could cause “lasting damage” to Washington’s tech-driven economy.
Broader impact on Washington’s economy
Advocates for Washington’s current tax model argue that rising wealth overall reflects economic strength. Progressive groups like the Institute for Policy Studies reported a 46.9% increase in Washingtonians with $1 million or more in assets between 2022 and 2024.
However, critics say those numbers obscure a deeper problem: Washington may be failing to retain the ultra-wealthy individuals and innovators whose spending, investments, and philanthropy fuel job growth.
While Washington’s capital gains tax generated $1.2 billion in revenue, policymakers now face questions about whether the long-term economic costs outweigh the short-term gains.
Calls for policy changes
Opponents of the state’s tax direction claim the outmigration is a warning sign. They argue that rolling back the capital gains tax, shelving proposed wealth taxes, and easing regulatory burdens could help restore Washington’s competitiveness.
“It’s not too late,” business groups say, urging lawmakers to refocus on economic growth before the talent drain worsens.
As Washington weighs its next steps, the debate over how to balance tax fairness with economic vitality is expected to intensify in the months ahead.