Howard Schultz, the billionaire executive who turned Starbucks from a boutique Seattle-area coffee chain into a global behemoth spanning thousands of stores, says his former hometown has grown “hostile” to business under a “socialist” mayor.
Schultz, who recently relocated to Miami at around the same time that lawmakers in Washington state were advancing a new tax on millionaires, penned an op-ed for the Wall Street Journal on Monday warning that more businesses were planning to leave the high-tax Pacific Northwest.
According to Schultz, the “ecosystem” that gave rise to blue-chip firms such as Microsoft, Amazon and Costco has become “fractured” due to “serious problems” including “chronic homelessness, disorder in core business districts, persistent budget deficits, declining public-school outcomes and a slowing technology hiring cycle.”
Schultz’s company, Starbucks, recently announced it was growing its national footprint with new corporate offices in Nashville — a move that some have speculated is the prelude to the coffee chain eventually leaving Seattle permanently.
A Starbucks spokesperson declined to comment.
He cited Seattle Mayor Katie Wilson and her “socialist rhetoric [which] vilifies employers, even while she continues to rely on them for revenue.”
“She has encouraged residents who disagree with her policies to leave,” Schultz wrote.
Lawmakers in Olympia are not helping the cause, according to Schultz, who said they “have opted to increase the burden on businesses and successful entrepreneurs in ways that discourage them from growing within the state…”
Schultz, who remains Starbucks’s largest shareholder despite stepping down from his third stint as CEO in 2023, blamed the state’s “regressive” tax system.
Washington has long marketed itself as a business-friendly state because it does not levy a traditional corporate or personal income tax.
Instead, the state relies heavily on its business-and-occupation, or B&O, tax — a gross-receipts levy that taxes companies on revenue rather than profits, meaning firms owe taxes even if margins are thin.
But in recent years, business leaders and wealthy founders have argued that the tax burden has become more layered and aggressive, particularly in Seattle.
The state imposed a 7% capital-gains tax beginning in 2022, later adding an extra 2.9% levy on gains above $1 million.
Seattle also rolled out its JumpStart payroll tax on highly compensated employees, while voters approved a separate social-housing tax targeting compensation above $1 million.
The changes have fueled complaints from executives who say the cumulative burden is pushing firms and high earners to reconsider staying in Washington.
Fisher Investments explicitly cited the state’s capital-gains tax when it moved its headquarters from Washington to Texas in 2023, while some companies have shifted jobs from Seattle to nearby Bellevue in part to reduce exposure to city payroll taxes.
In addition to those levies, Washington recently approved a new “millionaire tax” that will impose a 9.9% state tax on income above $1 million starting in 2028 — a major shift for a state that historically had no broad personal income tax.
Schultz is warning that Seattle and Washington state are on a path that could eventually lead to economic ruin.
“Cities and states don’t decline overnight,” Schultz wrote. “They drift when public safety, fiscal stability and economic vitality deteriorate together.”
“Washington once embodied the future of the US economy, and it can again,” Schultz wrote.
“But the current government needs to learn that future entrepreneurs won’t be attracted by ineffective public systems, especially when joined with policy and political rhetoric that demonize businesses.”
The Post has sought comment from Wilson and the office of Washington Gov. Bob Ferguson.
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