A new report from the Downtown Seattle Association delivers a stark verdict on Seattle’s signature economic experiment. Five years after the city imposed a JumpStart payroll tax on large employers, downtown Seattle has shed roughly 30,000 jobs. Office building values have plummeted 48 percent, wiping out more than $10 billion in taxable value. Office vacancy sits at 32 percent in the core.
Just across Lake Washington, Bellevue tells a very different story. With no comparable payroll tax, the city has added jobs and seen commercial property values rise 7 percent over the same period. Major employers have voted with their feet, and their payrolls. Amazon shifted thousands of employees to Bellevue. TikTok and the Pokémon Company International chose Bellevue for major expansions. Capital is flowing where it is welcomed, not penalized.
This is not coincidence. It is policy consequence.
Washington Policy Center has warned for years how Seattle’s approach, layering the JumpStart tax on top of already high business and occupation taxes, a social housing tax, and the nation’s highest minimum wage, raises the cost of doing business to punitive levels. Businesses do not simply absorb these costs. They relocate, reduce hiring, or automate. The tax was sold as a way to fund housing and recovery. Instead, the tax has accelerated the exodus of the very high-wage jobs that generate broad economic activity.
Bellevue’s success is not mysterious. The city has maintained a more competitive tax and regulatory environment while still providing quality services and infrastructure. Employers and workers respond to incentives. When one city makes high-productivity jobs more expensive and another does not, talent and investment follow the path of least resistance. The Eastside has become the beneficiary of Seattle’s self-inflicted wounds.
Seattle city leaders continue to defend the JumpStart tax as a success because it raises revenue. That is a remarkably low bar. Any tax raises revenue in the short term. The real test is whether it strengthens or weakens the economic engine that produces that revenue over time. By that measure, JumpStart has failed.
The contrast between Seattle and Bellevue should serve as a warning to policymakers across Washington. Punitive taxes on success do not create equity. They create flight. Lower-tax, pro-growth jurisdictions attract the investment and jobs that struggling cities desperately need. Bellevue is proving the point every day. Seattle’s leaders would do well to study the results instead of doubling down on the policies that produced them.
