Washington’s New Millionaire Tax Sends a Message. Texas Hill Country Offers a Better One.

Mar 18

Split image showing concern over Washington’s new 9.9% millionaire tax, with a dark Seattle skyline on one side and a brighter Texas Hill Country and San Antonio scene on the other, suggesting relocation. — **Is it time to trade one Space Needle for another?**

For high earners, this is not just about one tax bill. It is about direction.

Washington has now approved a new 9.9% tax on Washington taxable income above $1 million, set to begin January 1, 2028, with the first payments due in 2029.[1] That comes on top of Washington’s already tiered capital gains tax, which now taxes taxable Washington capital gains above $1 million at 9.9% for tax year 2025 returns due in 2026.[2] Even if you are not writing the check tomorrow, the signal is unmistakable: Washington is moving away from one of the competitive advantages that long made it attractive to founders, executives, investors, and highly compensated professionals.

That is why the real issue is not immediate pain. It is policy trajectory.

Mainstream coverage is already reflecting the concern. Reuters reported that Seahawks General Manager John Schneider said the tax will “sting” from a recruiting standpoint because Washington’s lack of state income tax had long helped the state compete for high-end talent.[3] GeekWire reported strong concern from business and tech circles, including warnings that the shift could hurt entrepreneurship, startup formation, and investment confidence.[4] Axios noted the tax is also likely headed for legal and political challenges, underscoring that Washington is entering a new period of tax uncertainty rather than tax clarity.[1][4]

Social media reaction has been even blunter. In public Reddit discussions, many commenters are not merely focused on the 9.9% rate itself. Their larger concern is precedent. Once a state normalizes an income tax targeted at the top end, many assume the threshold can eventually move downward or the tax structure can broaden.[5] Whether that ultimately happens is almost beside the point. High earners do not just evaluate current exposure. They evaluate future exposure. They look for predictability, stability, and signs that a state still wants them there.

That is where Texas, and specifically San Antonio and the Hill Country, become highly relevant.

Texas has no state income tax, and while it does rely heavily on local property taxes, it still offers a fundamentally different tax posture from Washington.[6] Just as important, the lifestyle and cost equation is hard to ignore. Redfin’s February 2026 data shows Seattle’s median home sale price at $850,000 versus $260,000 in San Antonio.[7][8] Apartments.com shows Seattle’s overall cost of living at 58.3% higher than San Antonio’s.[9] For many high-income households, that does not merely mean lower monthly overhead. It means the ability to buy more home, keep more capital working, reduce lifestyle friction, and make a strategic move before policy risk compounds further.

And San Antonio is not some secondary outpost. It is now widely reported as the nation’s sixth-largest city.[10] That matters. It means access to international air service, major medical infrastructure, expanding business activity, cultural depth, and the practical convenience that affluent households expect. At the same time, nearby Hill Country communities such as Boerne and Fair Oaks Ranch offer what many high earners actually want after years in a high-cost coastal market: more land, newer homes, lower day-to-day stress, strong community identity, and a better balance between privacy and access.

Not every wealthy Washington resident will leave. Some will stay, some will wait, and some will assume the courts or voters will undo the law. But for those already asking whether Washington is becoming less hospitable to capital, ambition, and long-term wealth preservation, the better question may be this: why wait?

If your state is showing you where it is headed, believe it. Then act accordingly.

FAQ

What exactly did Washington approve?
Washington approved SB 6346, which imposes a 9.9% tax on Washington taxable income above $1 million beginning January 1, 2028, with first payments due in 2029.[1]

Is this separate from Washington’s capital gains tax?
Yes. Washington also has a tiered capital gains tax. For tax year 2025, taxable Washington capital gains above $1 million are taxed at 9.9%.[2]

Why are some high earners concerned now if the tax starts later?
Because relocation decisions are often driven by policy direction, not just current-year tax liability. Many high earners view tax changes as signals about what may come next.[3][4][5]

Does Texas have a state income tax?
No. Texas does not levy a state income tax.[6]

Does Texas have property taxes?
Yes, but Texas has no state property tax. Property taxes are imposed locally by taxing entities such as counties, cities, and school districts.[6]

Why consider San Antonio instead of a larger Texas metro?
San Antonio offers a major-city economy and amenities, but at a much lower cost base than Seattle. It also provides direct access to Hill Country communities that appeal to households seeking space, scenery, and a less compressed lifestyle.[7][8][9][10]

Why do people look at Boerne and Fair Oaks Ranch?
Because they combine proximity to San Antonio with a more residential, Hill Country lifestyle. For many relocating households, that is the sweet spot between convenience and quality of life.