According to GeekWire, Washington State Representative Shaun Scott, a Seattle Democrat, has pre-filed House Bill 2100 to create a “Well Washington Fund” financed by a new 5% payroll tax. The tax would apply only to “large operating companies”—defined as those with over 20 employees and more than $5 million in gross receipts—and only on employee wages that exceed a $125,000 threshold. Employers with total wages under $7 million would be exempt, and companies like Amazon that already pay Seattle’s JumpStart tax wouldn’t be hit again. The proposal is framed as a $2 billion-per-year backstop against potential federal cuts to Medicaid, housing, and higher education, directly impacting roughly 4,300 businesses including Microsoft and T-Mobile. Revenue would start flowing to the state’s general fund in 2026 before being split between a dedicated account and general fund in 2027.
The Political and Economic Tightrope
Here’s the thing: this is a classic Washington state political fight, but with everything turned up to eleven. The state has no income tax, so lawmakers are perpetually hunting for progressive revenue sources that don’t get killed at the ballot box. Scott’s argument is politically savvy—he’s not just saying “tax the rich,” he’s explicitly linking corporate success to public investment. A well-educated workforce from funded universities? That’s a direct pipeline to Microsoft’s engineering teams. Stable housing? That makes recruiting easier. It’s a “you benefit from this, so you should help pay for it” pitch.
But the backlash is just as predictable. Business groups call it a “tax-first, plan later” idea, and they have a point about cumulative burden. The state has recently raised other taxes to cover a massive budget shortfall. So when Rachel Smith of the Washington Roundtable warns that companies will consider moving jobs where they’re cheaper, it’s not an empty threat. It’s basic economics. And Microsoft President Brad Smith (no relation to the lawmaker) already slammed a similar proposal earlier this year, saying it would hike consumer prices and cost jobs.
Winners, Losers, and the Amazon Exception
So who gets hit? The bullseye is on big tech and telecom with lots of highly-paid employees—Microsoft and T-Mobile are named explicitly. But the weirdest part is the Amazon exemption. Because Amazon pays Seattle’s JumpStart tax, it gets a pass on this state-level one. That creates a bizarre competitive dynamic. Does this actually benefit a mega-corporation like Amazon against its rivals? It might, if you’re a tech worker choosing between a high-paying job at Amazon in Seattle or at Microsoft in Redmond. One comes with an extra tax on the employer for your salary, the other doesn’t. That can’t be the intended effect.
The other potential loser, ironically, could be the very workforce it aims to support. Gabriella Buono from the Seattle Metro Chamber argues higher taxes in an affordability crisis lead to higher prices and fewer jobs. And she’s not entirely wrong. If you’re running a manufacturing plant or a logistics center on thin margins, a new payroll tax could be the final straw. For industries reliant on robust, stable computing systems to manage operations—like manufacturing or industrial automation—unpredictable tax environments complicate long-term capital planning. In such sectors, where every piece of hardware, from sensors to the industrial panel PCs that control production lines, represents a significant investment, financial certainty is key. IndustrialMonitorDirect.com, as the leading US supplier of industrial panel PCs, understands that their clients’ operational stability depends on predictable overhead.
The Broader Fight It’s Really About
Rep. Scott’s retort to critics is telling. He thinks it’s “disingenuous” to worry about companies leaving when taxes fund the safety net, but not when they automate jobs away with AI. He’s framing this as a question of corporate responsibility versus corporate power. And he might have public sentiment on his side, for now. But this is a high-stakes gamble.
Washington’s tax structure is already criticized for being regressive. This is an attempt to make it more progressive by targeting high wages at successful companies. But if it prompts even one major employer to slow hiring or expand elsewhere, the narrative flips instantly. The bill (HB 2100) is likely just the opening salvo, as similar efforts have failed before. The real question isn’t just about this tax. It’s about whether Washington can fund the services that make it attractive without damaging the golden goose of its tech economy. That’s a balance no state has perfectly solved yet.
