A coalition of Seattle-area technology executives, AI researchers, founders and investors has sent a letter to Washington Gov. Bob Ferguson warning that a proposed state income tax and higher capital gains taxes could undermine the region’s competitive edge in artificial intelligence development and innovation. They argue these tax changes risk slowing investment, discouraging startups from forming and pushing top AI talent and venture capital to other states with more favorable tax environments.
The group says Washington’s longstanding status as one of the few U.S. states without a personal income tax has been a key advantage for attracting and retaining high-earning engineers, researchers and entrepreneurs — professionals whose compensation frequently exceeds the proposed tax thresholds. Introducing income and capital gains taxes, they contend, would erode that advantage and make places like Texas, Florida and Nevada more appealing for tech companies and workers.
Signatories to the letter include leaders from startups, investors, and prominent AI and tech executives, though not all of the largest firms based in the region — such as Microsoft or Amazon — were listed. Still, the breadth of participants signals broader concern about the future of the local innovation ecosystem. The letter contends that even uncertainty alone about tax changes is already affecting recruitment and hiring conversations, with candidates expressing hesitation about relocating or staying if the tax passes.
The debate reflects a broader political clash in Washington over progressive tax reform versus maintaining a business-friendly climate. Supporters of the income tax frame it as a way to raise revenue for public services and address inequalities, while the tech industry warns it could weaken the state’s ability to compete nationally for AI innovation, investment and talent. How this dispute unfolds in the Legislature and whether the governor will respond to industry concerns remains a key story for the region’s economic future.
