WA lawmaker pushing statewide payroll tax to generate billions

WA lawmakers to push for new statewide payroll tax

Ahead of next year's legislative session, one lawmaker says he plans to push a new tax on Washington companies through a statewide payroll tax.

OLYMPIA, Wash. - A Washington state lawmaker on Tuesday set the tone for the upcoming legislative session, making the case for a new tax on companies statewide.

Rep. Shaun Scott plans to sponsor a bill to impose a payroll tax on companies with high earners. 

The backstory:

The idea is similar to what Seattle has already imposed. Scott’s statewide measure would set a 5% tax on salaries that exceed $125,000. Scott says it could generate billions every year that would be spent on affordable housing, education and health care.

Rep. Scott is serving his first time after being the first Democratic Socialist to be elected to the legislature.

Scott says extra revenue is needed to combat President Trump’s policies under the "Big Beautiful Bill."

During Tuesday’s press conference on the steps of the Capitol, Scott was surrounded by groups supporting the measure, including Low Income Housing Alliance, Tech4Taxes, and unions like SEIU775NW and Washington Federation of State Employees.

"I think we will have the public on our side," Scott said.

Rep. Scott says Washington voters supported the capital gains tax and believes it’s a good sign that a payroll tax would be a popular measure.

The other side:

Rep. Chris Corry is calling the proposal insane.

"We are coming up with another idea to go after businesses who are already struggling in our state and are already moving, and it’s especially aggravating to see a tax that has been so detrimental on Seattle alone, to see that move statewide and assume it’s going to have any sort of positive net effect on jobs and business in this state is really insane," Corry said.

Corry is also skeptical that it would raise the type of revenue Scott is projecting, pointing to companies like Amazon that moved jobs to Bellevue after Seattle imposed the payroll tax.

"It’s easier now to move businesses, especially when you have states competing for them," Corry said.

Corry says in the last 14 years, Washington went from being in the top 10 to run a business, to the bottom 10.

"The next Microsoft, the next Amazon, you name it, will not relocate here, will not start here because it is no longer a place to do business," Corry said.

On Tuesday, Scott called questions from reporters raising job concerns as "pro-corporate propaganda."

"When I hear people voice concerns about jobs that might be shed, which is a very important question, there are many industrialized communities throughout Washington state that have been hit very hard from corporations that did decide to relocate because they didn’t want to pay what they owed in taxes," Scott said.

Scott called the talking points "disingenuous," saying he is not hearing concerns about the same companies investing in AI that he says is designed to divest human labor.

Groups released statements in reaction to Scott’s payroll tax announcement.

Washington Roundtable, a non profit made up of executives in the private sector, released a statement on Tuesday which reads, in part:

"Instead of repeating a cycle that isn’t working – tax first, plan later, and never bother to do the math on the impact – we should hit reset. That means working with state leaders on real solutions that curb rising costs, focus on affordability, and deliver results people can see and feel in their communities. It means managing spending, avoiding budget maneuvers that kick the can, and prioritizing reforms that make government work better, not just get bigger," President Rachel Smith said.

Meanwhile, Gabriella Buono with the Seattle Metro Chamber released a statement which reads, in part:

"Adding billions in new spending and raising taxes in an affordability crisis will mean higher prices on everyday essentials, fewer job opportunities, and more closures in sectors that are already on the edge."

This year, the Democrat-controlled legislature passed a controversial $9 billion in taxes against businesses to plug a budget deficit this year. Despite those taxes, Republicans say the deficit in the billions will persist in the coming years. They see it as a spending problem, while progressives say the wealthy and big corporations are not paying enough.