Microsoft President Brad Smith continued his critique of state and local policymakers in Washington, warning that a tax-first agenda risks undermining the region’s economic foundation.
Speaking at the Seattle Metropolitan Chamber’s annual meeting Tuesday, Smith echoed comments he has made in other public forums this year, calling out Washington’s approach to taxation and lamenting what he described as a disappearance of economic development from the political agenda.
“In the last couple of years, I feel that people — especially in Olympia and to some degree in western Washington — have forgotten you can’t have a healthy community if you don’t have healthy businesses,” he said in a fireside chat with Teresa Hutson, a corporate vice president at Microsoft and incoming board chair at the Chamber.
Smith’s message on Tuesday was a call to action for business leaders and nonprofits in Microsoft’s home state to push back against what he said was a “constant quest to find new taxes.”
“Look behind you. There’s no cavalry coming,” Smith said. “If we’re going to win this fight, we’re going to need to fight it ourselves. We’re going to need to rally. We’re going to need to marshal resources.”
He pledged that Microsoft would provide financial support “for the kind of education campaign that this state needs to understand what the business community requires in order to be prosperous.”
Smith has previously criticized tax and budget proposals from Washington lawmakers this year, including a payroll tax on large employers that ultimately did not pass. Microsoft spent more than $1 million on political action committees during this year’s legislative session.
The state — which does not have an income tax — did approve several new business taxes this year, including the expansion of the retail sales tax to a broader range of digital and professional services, as well as an increase in a computing surcharge paid by major tech companies such as Microsoft and Amazon and an increase to the capital gains tax. A wealth tax proposal was not approved.
Smith cited the state’s new estate tax laws, saying that family businesses “will not be able to stay here if the estate tax remains where it is.”
The longtime Microsoft leader pointed to the company’s philanthropic efforts and donations as evidence illustrate that businesses contribute to local communities beyond tax payments.
“People who think that the only thing that businesses do for the greater good is pay taxes are missing what’s going on here,” he said.
Washington ranked No. 14 overall on on CNBC’s latest list of top states for business — coming in 48th for “cost of doing business” but 4th for technology and innovation.
Smith cautioned that the state’s success should not be taken for granted, saying progress for communities and cities is not always linear. He argued that Washington is at a “critical moment.”
“We’re all in this together,” he said. “If we can’t sustain economic development, if we can’t sustain a healthy business community, we will not have a strong economy. And if we do not have a strong economy, none of the other aspirations that people have will be realizable.”
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