The Exodus from Seattle to the Sunbelt

Howard Schultz arrived in Seattle from New York in September 1982 to take a job at a small Pike Place coffee roaster called Starbucks. He stayed more than four decades and turned the company into a global brand. Washington was his adopted home, a place he was proud to hang his hat.

But Schultz has now moved to Miami, and not for the weather. On Monday he published in The Wall Street Journal an indictment of what Seattle has become.

The Schultz commentary is measured, even wistful. But make no mistake, it is warning. He still calls Washington his home in spirit. He praises the state’s history. He acknowledges that Seattle’s challenges, including chronic homelessness, downtown disorder, persistent budget deficits, declining schools, and a cooling technology hiring cycle, are not unique to it.

What is unique, he writes, is Washington’s response. The capital has decided that prosperity can be mandated by redistribution rather than generated by growth. Starbucks is now moving hundreds of corporate roles to its new $100 million Nashville hub, which will bring up to 2,000 jobs to Tennessee over five years. The same day the op-ed appeared, news broke that the company was eliminating another 61 corporate technology jobs at its Seattle headquarters.

Lyceum has documented this trajectory before. When Seattle Mayor Katie Wilson stood at Seattle University in April and waved goodbye to the millionaires departing the state, the audience cheered. The wave was the policy. What Schultz adds to that picture is what only a founder can add: testimony from inside the ecosystem, from a man who is not a Republican, not a culture warrior, and not anyone’s idea of a partisan. He is the friendly witness. His testimony is that the place is broken.

Capital Knows the Difference

Schultz’s case turns on arithmetic. Businesses, he writes, “build before certainty exists.” They hire before revenue is guaranteed. They invest where risk-taking is rewarded, growth is permitted, and government understands itself as a partner of private enterprise rather than its adversary. When those conditions hold, capital arrives and stays. When they do not, capital leaves. The same calculus guides any executive choosing between a Nashville site and a Seattle site, and party registration has nothing to do with it.

The conditions Schultz lists extend well beyond tax rates. He cites public safety, fiscal stability, the quality of public schools, and the predictability of regulation. The combined state and local sales tax in Seattle, which Schultz puts at 10.55%, is regressive and high. Washington’s new 9.9% income tax on earners above $1 million, signed by Governor Bob Ferguson on March 30, was designed, by the explicit admission of its lead sponsor, to force the state Supreme Court to overturn a 1933 precedent (Culliton v. Chase) that treats income as property. But tax rates alone do not move a corporate headquarters. What moves a headquarters is the cumulative judgment that the place can no longer reliably deliver a workforce, a downtown, a school system, a court system, and a budget. Schultz’s verdict is that on every front, Seattle is losing ground.

The Pattern Across the Map

What Schultz describes in Seattle is not local color. The same pattern is playing out across the blue-state map, and the IRS migration data tell the story plainly. Between 2022 and 2023, California shed a net 100,397 income-tax filers and $11.9 billion in adjusted gross income. New York shed 71,987 filers and $9.9 billion. Illinois shed 28,609 filers and $6 billion. New York’s own tax department reports that nearly 1,700 millionaires changed their address out of state in 2024 alone. These figures register the cumulative result of governing assumptions that treat the productive class as a resource to be extracted rather than a constituency to be retained.

Now let’s look at the Sun Belt. Florida has no state income tax. Tennessee has no state income tax. Texas has no state income tax. These states have spent two decades simplifying regulation, modernizing infrastructure, and competing for capital. Schultz cites the bipartisan National Governors Association initiative aimed at pro-entrepreneurship policy reform. The states that are growing are the ones implementing those reforms. The states that are losing are the ones doubling down on the opposite theory. Jeff Bezos decamped for Miami in November 2023, months after Washington’s Supreme Court upheld the state’s 7% capital gains tax. Schultz followed this March, as Washington lawmakers were finalizing the millionaires tax. The companies they built are reading the same map.

Government as Result, Not Intention

The line in Schultz’s op-ed that lingers comes near the end. Government, he writes, should be judged by results, not intentions. In Washington, steadily increasing government spending has not delivered commensurate results on homelessness, addiction, or schools. Entrepreneurs are accustomed to accountability. If a company fails to deliver value, it loses customers. If a company misallocates capital, it absorbs the loss. Government has no equivalent feedback loop. When a city’s policies fail, the bill falls on the residents and the businesses that remain, while the officials who designed those policies move on to the next initiative.

Mayor Wilson laughed at her audience in April. Schultz did not laugh on Monday. He filed his commentary from Florida and addressed it to the Seattle he built and to the Seattle that is being lost. Cities and states do not collapse overnight, he warns. They drift. Downtown vacancies reduce foot traffic. Foot traffic falling weakens small businesses. Employment falls. Revenue shrinks. Services erode. And then confidence, which Schultz calls “hard to build and easy to lose,” begins to evaporate.

Washington is not condemned to this outcome. Schultz, who could have remained silent and enjoyed his Miami sunshine, chose instead to write a public letter offering the state a way back. The path is not exotic. It runs through sensible taxation, accountable spending, public order, and a government that understands its own role.

Whether Seattle takes the path is up to its voters. Whether other businesses, to say nothing of average Americans, follow Starbucks to Tennessee is up to them. The arithmetic will not negotiate.