Taxes on the mind at Seattle gathering of downtown business leaders

Taxes were on the minds of Seattle business leaders Wednesday as they gathered for the Downtown Seattle Association's annual "State of Downtown" event.

The event happened on the same afternoon when the Washington state Legislature appeared on the brink of passing a “millionaires tax.”

RELATED: Washington state income tax passes House after grueling 25-hour floor debate

Some of the attendees expressed concern that businesses were already leaving the area to reduce their exposure to state and local taxes.

Is it fair to assume taxes are the cause? After all, there are other potential explanations forcing businesses to make hard decisions: the rise of AI, tariffs, and general economic instability.

“ Well, we've got a control group right across the lake,” said Downtown Seattle Association CEO Jon Scholes backstage at the event. “Bellevue’s facing those things, just like Seattle. They’re not immune or insulated. But they don’t have the same business taxes on their employers there. And they’re gaining jobs.”

RELATED: Howard Schultz moves away from Starbucks roots, trading Seattle for Miami

Seattle Mayor Katie Wilson campaigned on new progressive tax revenue as one strategy to balance the city’s budget and fund new programs to address the affordability crisis.

But as she took the podium to speak at Wednesday's event, she acknowledged the concerns in the room. “I want you to know that I’m aware that it is not ideal for our tax environment for business to be wildly out of step with neighboring jurisdictions,” she said.

Wilson said she's still committed to progressive taxes, but promised to look carefully at the city's spending and make cuts where necessary, instead of continually adding to the tax burden.

Derek Thompson, the evening’s keynote speaker, offered his own take backstage.

His talk had focused on his “Abundance agenda,” a movement (inspired by his book, "Abundance") that encourages liberal cities to stop regulating themselves so much, through zoning rules and such, that they can’t solve modern problems like the housing shortage.

But Thompson sees taxation as a useful tool, rather than another regulatory obstacle.

“The liberal case for progressive taxation redistribution … is very similar to the liberal case for deregulation in many housing markets," he said. "What we want to do is to make it easier to be a middle- and lower-income person in America. One way to do that is redistributing money. Another way to do that is to build some damned housing.”