The last time Washingtonians voted on an income tax, the state's biggest corporations opened their wallets to kill the idea.
In 2010, Microsoft and Boeing and top executives for companies including Amazon bankrolled opposition to an initiative that would have levied a tax on people making $200,000 or more a year. Voters overwhelmingly rejected the plan.
But this year, as voters weigh whether to uphold or repeal the state's new high-earners income tax — or millionaires tax" — those big corporate players have maintained a Switzerland-like neutrality.
They've given to neither side in the fight over Initiative 645, which would repeal the new 9.9% tax on household income over $1 million.
Why the conspicuous silence this time around? As the saying goes, it's better to be at the table than on the menu.
While not exactly cheering for the new income tax, major employers like Microsoft have focused on warding off other tax proposals they view as threats, like a "wealth tax" levied on stock holdings and other financial assets. They've also feared a statewide expansion of Seattle's JumpStart tax on big company payrolls, which they view as a job-killing threat to their competitiveness.
Microsoft President Brad Smith and other corporate leaders stood up a fierce multimillion-dollar lobbying effort in 2025 to warn the Legislature against passing those proposals. They even signaled they'd fund an antitax ballot initiative, if needed, to block them.
Ruling out the wealth and payroll taxes amid such opposition, Gov. Bob Ferguson endorsed the "millionaires tax," signing it into law this year after a marathon debate, despite strong opposition from Republicans and many business executives.
Unless overturned by voters or the courts, the new tax will start on 2028 incomes, with the first payments due in 2029. It's expected to raise more than $3 billion a year, with most of that devoted to the state operating budget that pays for K-12 schools, universities, healthcare and other services.
A "no" vote on I-645 upholds the tax, while a "yes" vote repeals it. Ballots were mailed to Washington voters last week.
When Democratic lawmakers broached the new income tax, big business groups like the Washington Roundtable, which includes Microsoft and other big private employers, were in the dealmaking loop, seeking other tax-policy trade-offs.
Lawmakers didn't give them everything they wanted, but they did roll back some recent business tax increases — like a sales tax on services — that had been imposed a year earlier. They also rolled back a big increase in the estate tax on inherited property and assets, acknowledging it was leading wealthy people to consider moving elsewhere.
Washington Roundtable President Rachel Smith, who was involved in tax discussions with lawmakers, said the relative neutrality of big employers when it comes to I-645 does not mean they're satisfied with the state tax and business climate.
"We are concerned generally about the state of business taxes in Washington state. It is not a single tax. It is the stacking of taxes. It is the rates where we are much higher than other states," she said in an interview.
Smith added that a priority for major employers is supporting economic development efforts — such as a new business advisory council launched by Ferguson — while ensuring that "ill-advised" ideas like a statewide payroll tax "don't see the light of day" in the upcoming legislative session.
The tacit deal that has Microsoft and others have made in the "millionaires tax" versus payroll tax discussion was crystallized at a news conference last month on the Seattle waterfront.
At the event, state Senate Majority Leader Jamie Pedersen, D-Seattle, was asked whether lawmakers will pursue a statewide payroll tax in the upcoming legislative session. He replied the chances are "vanishingly unlikely" — so long as voters defeat the income tax repeal measure, I-645, at the ballot box.
In a KOMO TV interview after the news conference, Microsoft's Brad Smith called such payroll taxes "literally job killers" that would amount to "waving a flag asking businesses to move jobs out of the state as fast as possible."
Representatives for Amazon and Boeing did not respond to requests for comment last week.
Lack of corporate donors
As the debate on I-645 nears an end, the dearth of corporate money stands out when compared with the state's 2010 income tax fight.
Back then, the biggest donor to the income tax opposition campaign was then-Microsoft CEO Steve Ballmer, who donated $425,000. Microsoft as a company donated $75,000, and company co-founder Paul Allen gave $100,000. The opposition campaign also got $100,000 from Amazon founder Jeff Bezos, and $75,000 from Boeing.
This year, the lack of such corporate cash has annoyed and hamstrung the Yes on I-645 campaign, leaving it badly outspent with weeks to go before Election Day.
The pro-I-645 campaign has raised about $2 million. Its major donors include Madrona Venture Group, the Seattle venture capital firm, and Lawrence Hughes, a retired businessman, each giving $250,000.
The opposition campaign has raised more than $12 million, fueled mostly by public sector unions who say that without the new tax, lawmakers will have no choice but to slash important services.
With their wages and jobs potentially at stake, the state teachers union has given more than $3 million to the No on 645 campaign, and the state employees union has chipped in $2.5 million.
Steve Gordon, the retired trucking company executive who chairs the Yes on I-645 campaign and has also donated $250,000, said it's "unfortunate" that Microsoft has not weighed in on the income tax this year.
He said the company's stance has signaled to other big companies not to participate in the fight, even as owners of some smaller businesses speak out.
"Dividing the business community between large corporations and family businesses only helps the groups who oppose both in the future," Gordon said.
Instead of fighting the "millionaires tax," Microsoft and other business groups have devoted a substantial amount of cash to a PAC backing more business-friendly Democrats in some key legislative races against further-left opponents.
The PAC, Washington Needs to Compete, has raised more than $13.5 million, including $5 million from Microsoft, along with six-figure checks from Smith and several other current and former Microsoft executives, Public Disclosure Commission filings show. T-Mobile has donated $1 million.
The lack of big business cash when it comes to I-645 also reflects a reading of the prevailing political winds in 2026.
If polls are to be believed, Democrats are poised to have a big midterm year, with liberal and progressive voters swamping conservative candidates and causes. I-645 itself has trailed in polling, particularly when voters are read ballot wording that says voting for it will result in less money for schools.
Sandeep Kaushik, a spokesperson for the No on I-645 campaign, and a veteran political consultant who also worked on the 2010 income tax measure, said in a written statement that a lot has changed in the intervening years.
The tax package approved by the Legislature this year, he said, included "significant tax changes designed to make our economic and business climate more competitive."
The law signed by Ferguson, while raising taxes overall by billions of dollars, included some business tax cuts, including more than doubling the business and occupation tax credit for small businesses.
"Larger employers in the state understand that and we appreciate their decision to remain neutral in the campaign, Kaushik said.
© 2026 The Seattle Times. Visit www.seattletimes.com. Distributed by Tribune Content Agency, LLC.
