Washington state is lying to you. So for decades, the pitch has been simple. [music] Come to Washington.
No income tax. Keep what you earn. Build a business.
Build a life. And the government [music] will stay out of your paycheck. It's the reason that, say, Amazon is here.
It's the reason that Microsoft is here. And it's the reason that you might be here. But right now in Olympia, the doors are locked, the cameras are rolling, and they are dismantling that promise [music] brick by brick.
They aren't just coming, by the way, for the billionaires. [music] They aren't just coming for the ultra wealthy. They're opening a door that [music] once opened never closes.
Well, I am real estate broker Leah Courage, and today we are talking about Senate Bill 6346, the so-called [music] millionaire's tax. And if you've watched my other videos, you know that I'm not going to give you the news anchor version where I just [music] read a press release and smile. Today we are going to do a deep, brutally honest dive into exactly what this bill says, the legal gymnastics that they're using to force it down your [music] throat against the will of the voters.
And most importantly, we're going to look at the ghosts of Seattle's past, and warnings from other states [music] to see what actually happens when you declare war on your biggest taxpayers. So, if you own a home in Washington or if you run a business or [music] you just plan on making money someday, you need to watch this video until the very last second [music] because the game is officially changing. So, let's dive in.
[music] All right, let's cut through the noise. So, what is Senate Bill 6346? So, on [music] paper, it sounds great to a lot of people.
It's a 9. 9% tax on personal adjusted gross income. But, and here's the bold print, it only kicks in in earnings over a million dollar a year.
So, [music] if you make $1 million, you pay 10. If [music] you make 2 million, you pay roughly $99,000 in state taxes. And the selling point, fairness.
[music] So proponents, and let's be fair to them, they have a point here, will tell you that Washington has the most regressive [music] tax system in the country. So that means that a guy making $30,000 a year pays a higher percentage of his income [music] in sales tax and gas tax than Jeff Bezos does. That is a statistical fact.
So the pitch is, quote, [music] "We take it from the ultra rich and we fund our schools and we fix our mental health crisis and maybe we even lower taxes for the little guy. " It sounds heroic, right? Robin Hood kind of stuff.
But here is the brutal honesty that you need to know about. And here is why you should be sweating even if you don't make a million dollars. It's not about the million dollars.
[music] It's about the mechanism. For nearly 100 years since 1933, the Washington State Supreme Court has held that income is property. And under our Constitution, you cannot tax property at different [music] rates.
You can't say, "I'm going to tax your land at 1% but your neighbor's land at 10% [music] because he's rich. " It has to be uniform. So, this bill is a battering [music] ram.
The sponsors of the bill want it to go to court. They want a lawsuit. And why?
Because they believe the current Supreme Court in Washington is ready to overturn that 1933 ruling. So, if they win, they get [music] the court to say income is not property. It's an excise tax.
And then the floodgates absolutely open. Today, the threshold [music] is a million dollar. But in 5 years, maybe it's 500,000.
[music] In 10 years, maybe it's 250,000. Look at the federal income tax. When it was introduced in 1913, it applied to [music] less than 1% of the population.
It was a quote rich person's tax. And honestly, it wasn't even supposed to be permanent. But now, check your pay stub.
Everybody pays. Once the legal barrier is gone, the dial can be turned by a simple majority vote in Olympia. [music] That is the danger.
It's not the amount, it's the precedent. Quick interruption here. If all this talk about taxes and market shifts has you wondering what you should do [music] with your own property, then let us help.
So, my real estate team and I help people buy and sell all across Washington state every single day. We know the market, we know the laws, and we know how to protect your interests. So, text us or shoot us an email.
Our info [music] is below, and let's chat about your situation. All right, let's get back to the warning signs. [music] So, here's the part that really makes my blood boil, and it should make yours, too, regardless of your politics.
So, [music] do you remember 2024, just 2 years ago? So, we, the people of Washington, went to the [music] ballot box. We voted on initiative 2111.
That initiative was very simple. It [music] banned state and local governments from imposing an income tax. And guess what?
It passed overwhelmingly. The voters spoke. They said loud and clear, we do not want an income [music] tax in Washington.
So what is the legislature doing right now in 2026? They are ignoring you. So in Washington, the legislature can amend or repeal a voter initiative after 2 years and now [music] the clock has struck and they're moving in.
So they're effectively saying, "Well, that's cute that you voted, but we know better. " So this isn't [music] a tax issue, it's a trust issue. So, if the government can override a direct [music] mandate from the people the second the legal clock runs out, what is the point of the initiative process?
Now, I want to take you back in time because [music] we've seen this movie before and we don't have to guess what happens when you try to tax the big guys into [music] submission. We just have to look at Seattle versus Amazon. So, the year was 2018.
The Seattle City Council, led by the most progressive wing, decided that they needed money for homelessness services. Sounds normal, right? And their [music] target, it was Amazon.
So, they proposed a head tax. Basically, a [music] tax on jobs. If you were a big company, you had to pay a fee for every single employee that you [music] had.
And the rhetoric was exactly the same as today. Amazon has too much money. They need to pay their fair share.
It's just a drop in the bucket for Jeff Bezos. So, what did Amazon do? Did they just write a check and say, "Oh, I'm sorry.
Here, take my money. " No. They stopped construction on a massive downtown tower, Reineer [music] Square.
They put 7,000 jobs on hold and they effectively put a gun to the head of the Seattle economy and said, "Go ahead, pull the trigger. Let's see what happens. " [music] So, what did the city council do?
They passed the tax anyway. And then panic sets in. the unions, the construction workers, and the restaurants that rely on those Amazon employees.
They realize that if Amazon [music] leaves, then the city dies. And less than a month later, the city council repealed their own tax. [music] It was embarrassing.
But the damage was done and the trust was broken. And this is the crucial part. Look at Belleview today.
Look at the skyline in Belleview. that massive growth that they're seeing, that's thousands of Amazon employees now [music] working on the east side. That didn't happen by accident.
So, when Seattle declared war on business, [music] businesses moved 5 miles across the bridge. Belleview said, "Hey, we won't tax [music] your jobs. Come hang out with us.
" And guess what? They did. So, this is the lesson that Olympia [music] is completely ignoring right now.
Capital is mobile. Money has legs. And in 2026, with remote work and with Zoom and with headquarters that can be moved with a signature, you cannot hold wealthy people or businesses hostage.
So if Washington passes a 9. 9% tax, the wealthy in Seattle won't just move to Belleview. They're going to move to Austin.
They'll move to Miami. They'll move to Vegas. And when they leave, they take their capital with them and their spending and their philanthropy and their investment dollars.
So, you want to know why [music] I'm so worried about this happening in Washington? Because we have a crystal ball. [music] It's called California.
So, for years, people said, "Oh, the rich will never leave California. [music] The weather's too good. The culture is too good.
They'll just pay the tax. " That was the gamble, and California lost. Let's look at the roll call of the departed.
[music] So, these aren't just companies. These are economic engines that powered the state for decades. They packed up and they moved their headquarters mostly to [music] Texas, Tennessee, and Florida.
[music] So, let's talk about them now. So, Oracle, one of the grandfathers of Silicon Valley, gone to Austin. Hulet Packard Enterprise, the company that literally started in a Palo Alto garage, gone to Houston.
[music] Chevron, one of the state's oldest companies, gone to Houston. Charles Schwab gone to Dallas. >> [music] >> McKessan gone to Irving, Texas.
CBRE, which is the biggest real estate firm in the world, [music] gone to Dallas. Our real estate coaching company Tom Ferry moved to Dallas. Now, let's talk about the big one, Tesla.
So, this is the most important case study for Washington [music] legislators and they are ignoring it. So, in 2020, Elon Musk was the richest man in the [music] world. His company Tesla was the darling of the California green energy movement.
He was the golden goose, if you will. But then the state started treating him and [music] his company like the enemy. So during the pandemic, local officials physically blocked him [music] from reopening his factory even though other auto plants in the United States were running.
[music] A state assembly woman in California literally tweeted, "F Elon Musk. " So classy. [music] So what did he do?
Well, he didn't just tweet back. He moved his operation. He moved Tesla's headquarters to Austin.
He moved his personal residence to Texas. [music] So the financial impact is that when Elon Musk exercises stock options, it [music] creates a massive taxable event. In 2021 alone, he paid roughly 11 billion in federal taxes.
If he had been a full-time California resident for all of that, then the state [music] would have taken a cut of roughly $1. 3 billion from that one single individual. That is enough money to fund [music] entire state departments.
And it walked out the door because the state was hostile. But it's not just Elon, [music] it's the top 1%. So in California, the top 1% of earners pay nearly [music] 50% of all income tax revenue.
So think about that. If just a handful of those people leave, the budget collapses. [music] And this is exactly what happened.
So in 2022, California had a surplus. They were bragging about it. [music] But by 2024, they were facing a $68 billion deficit.
How do you lose $68 billion in 2 years? Because the sugar high of capital gains taxes dried up. The tech [music] market cooled.
The rich stopped selling stock or they moved away before they did and the [music] revenue completely vanished. So, if you're not in the ultra wealthy class, you're probably thinking, well, how does this actually affect [music] me? Well, if you're middle class, this is what should terrify you.
So, when the rich leave, you are left paying the bill. So the state didn't say, "Woops, we have less money, so that means we're going to spend less. " Of course not.
[music] They have to find the money somewhere else. So they started squeezing the people who can't leave. [music] Now, here is the hidden tax that nobody talks about, the SDI tax trap.
[music] So in California, there's a tax for state disability insurance. For years, this tax had a cap. If you made over $153,000, you stopped [music] paying it after a certain point.
The max you paid was about $1,300 a year. In 2024, to plug their budget holes, they uncapped that tax. They removed the ceiling.
So, [music] if you're a doctor, a software engineer, or a small business owner making $500,000 a year, your tax for this one specific line went from $1,300 to $5,500. If you [music] make a million, then you're now paying $11,000 just for disability insurance [music] tax. That is a 900% tax increase on highincome professionals, not billionaires, [music] professionals.
So this is the pattern. Tax the ultra rich. The ultra rich leave.
The budget creates a massive [music] hole. The state expands the tax to the upper middle class to fill the hole. Washington is currently at [music] step one.
We are looking at the millionaires tax and thinking, "Oh, it's not going to affect [music] me. " But if Jeff Bezos and Bill Gates and Steve Balmer all decide that they're tired of being targeted, if they move, for example, their official residency to Florida away from Washington, who do you think is going to pick up the tab for the budget deficit that they leave behind? It won't be them.
I'll tell you that much. It will be you. So, let's be brutally honest.
Is there [music] any good reason for this? Well, let's talk about the pros. So, yes, Washington's tax system is [music] absolutely unfair.
If you're a struggling family in Spokane, you're paying a huge chunk of money in sales tax. [music] That absolutely sucks. And our schools do need funding.
And our mental health system is absolutely [music] a disaster, one of the worst in the country. So if, and this is a massive if, if the state actually used this money to eliminate the BNO tax for small businesses like they [music] say that they're going to do or lower the sales tax, then that would be a gamecher. That would be real reform.
[music] But is that what this bill does? No. It expands spending.
It adds to the pot. It doesn't replace the bad taxes. It [music] just adds a new one right on top.
So, now let's look at the cons. And I mean, let's really look at them. So, [music] first you have a slippery slope.
Once the courts decide that income is no longer property, [music] that million-doll threshold isn't written in stone anymore. It's written in pencil. And trust me, they will lower it.
Mark my [music] words. And then there's the wealth flight. The ultra wealthy don't just sit there and take [music] it.
They leave. And when they leave, that revenue hole doesn't disappear. The burden just shifts [music] right onto the shoulders of the upper middle class and then the middle class and so on and so on.
Third is the absolute betrayal of [music] trust. Overturning initiative 2111 isn't just a policy. It's a message to the voters that says, "We [music] don't care what you think.
" It creates a cynical and angry electorate. And finally, you have the economic drag. So ask yourself, why would the next [music] Jeff Bezos start his company in his garage in Seattle today when he could launch in Austin [music] and instantly save 10%.
We are competing for talent on a global stage at this point. And this kind of legislation effectively hangs a giant closed for business sign on the front lawn of Washington state. So looping back and you say, "Okay, I don't make a million dollars.
Why do I care? Because real estate tends to flow [music] downstream. So if the executives, the business owners, and the investors all leave, then the luxury market is going [music] to soften.
And when the luxury market softens, it pushes pricing pressure down. But more importantly, if businesses [music] stop expanding here, like Amazon did in 2018, then job growth slows way down. No job growth equals no buyer demand.
No buyer demand equals home value stagnates [music] or it drops. We saw it in downtown Seattle. So when the money left, [music] the condos sat completely empty.
Prices dropped. The vibrancy of the city simply died. So essentially, we are playing with fire.
Washington has been a growth engine [music] for 30 years because we were the smart alternative to California. If we become California light, however, high taxes, high regulation, and high cost of living, but without the Californiaifornian sunshine, the [music] question is why would anybody stay? So, this has been a lot.
And listen, I know that it's heavy, and I know that it's [music] frustrating, but uncertainty is actually where opportunity grows. So, right now, people are scared. Investors are starting [music] to ask questions.
Homeowners are wondering if they should sell before the laws change, and buyers are wondering if they should [music] wait. Well, you cannot navigate this market just by reading headlines. You [music] need a strategy.
If you're thinking about selling your home in King County or Snomishomish or Pierce or anywhere [music] else in Washington, then you need to understand how these proposed laws are going to impact [music] your buyer pool. If you're an investor looking to buy, then you need to know which areas are insulated [music] from this flight and where the quote Belleview effect might happen next. And this is exactly what my team and I do all day, every [music] day.
So, we don't just open doors, we actually analyze the macroeconomic shifts to protect your wealth. We are the Courage Group. [music] So, we help people every day buy and sell real estate in this beautiful, crazy, [music] and complicated state.
So, if you're scared or confused or you just want a straight answer on what your home is worth [music] without the BS in this new climate, please call us, text us, email us. Our information is right there in the description [music] below. So, the legislation is in session.
The vote is coming. Keep your eyes [music] open. Share this video with your friends, with your family, with your business partners.
People need to know what actually is in Senate Bill 6346. Don't let them do this in the dark. Thank you so much for watching this video.
And if you like this brutally honest breakdown, then do me a massive favor. [music] Hit the like button as it helps the algorithm show this truth to a lot more people. and subscribe and turn on notifications for our [music] channel if you haven't already because we are tracking this bill every single day and I will update you the [music] moment that something changes.
So, we are devoted to giving you the transparent, totally honest [music] truth about Washington state and all things real estate and the good, the bad, and the ugly and everything in between. [music] So, I'm Leah Courage. Thank you again so much for watching.
Keep exploring and we will see you in the next video.
