Like me, about half of all workers in Washington are employed by small and medium businesses, either their own or someone else’s. That simple truth is exactly why the new 9.9% tax on income over a million dollars should worry voters and business owners throughout Washington.
While politicians sell it as only affecting “the rich,” the new tax will hit the many successful restaurants, contractors, and other small businesses that reach that threshold and (as is common) are set up as pass-through entities whose incomes flow through to their owner’s personal income tax returns.
Of equal or greater concern, when higher earners and their companies leave our state to avoid the new tax (in addition to rising B&O taxes, increasingly burdensome government regulations, the state capital gains tax, and nation-leading estate tax), our customers disappear with them. This means less spending in our restaurants, fewer clients for our contractors, and shrinking opportunities for the very communities we represent.
I’m a co-founder of the Ethnic Communities Chambers of Commerce, which represents thousands of first-, second- and third-generation small business owners - many of them restaurant owners, contractors, and service providers. Our members are already struggling with skyrocketing costs and shrinking margins. Now this tax threatens to drive away the customers they depend on, making it even harder to survive, grow, and pass that success on to the next generation.
This isn’t just about taxes - it’s about what we’re willing to accept as “normal.” When politicians break their promises, when the will of Washington voters is overturned by the courts, and when basic public safety disappears from our streets, people stop believing that hard work and strong values will be rewarded. That loss of faith hurts small business owners most of all.
The real tragedy is what this does to families. When kids watch their parents work long hours, overcome obstacles, and still struggle just to keep their businesses’ doors open, they lose faith in the idea that hard work pays off. Instead of seeing entrepreneurship as a path to pride and success, they learn to expect less. That mindset shift can echo for generations.
Washington has a long history of politicians making promises they have no intention of keeping. Voters have repeatedly rejected a state income tax for almost a century, and here we are again, with yet another attempt to get around the will of the people. Our communities have seen this movie before, and we’re tired of the same ending.
That’s why the Ethnic Communities Chambers of Commerce has stepped up as a plaintiff in the lawsuit against this tax. We’re fighting to protect not just our businesses, but the promise that hard work and entrepreneurship can still lead to a better life for our members and their families.
We’ve watched the wealthy and their businesses leave Washington in growing numbers. Nearly one in four high-net-worth individuals are now considering leaving the state. When they go, our restaurants get quieter, our contractors get fewer calls, and opportunity itself starts to shrink. Small businesses don’t recover from that kind of loss.
The question we must ask ourselves is this: What are we willing to accept as normal? Skyrocketing taxes, broken political promises, unsafe streets, and failing schools are not normal. We cannot allow these things to become our standard, because if they do, we lose the very foundation that makes success possible for our families and our communities.
This tax is just the latest chapter in a long story of politicians who promise one thing and deliver another. Washington voters have twice stopped a car tab tax, only to have the state Supreme Court undo the will of the people by simply calling it something different. That kind of cynicism is exactly why taxpayers have become so jaded.
Our children deserve to see their parents succeed through hard work, not despite it. The Ethnic Communities Chambers of Commerce is drawing a line. This tax threatens the very communities its proponents claim to help. It’s time to stop accepting broken promises and shrinking opportunity as normal. Washington’s small businesses deserve better.
Mike Sotelo, co-chair of the Washington Ethnic Chambers of Commerce Coalition, is founder of Consolidar, which concentrates on education and training, workforce development, and healthy living in the Latino community.
