‘That feels like a threat’: Jake flags Sen. Pedersen’s payroll tax warning if WA voters repeal the millionaires tax

KIRO host Jake Skorheim questioned what Senate Majority Leader Jamie Pedersen was doing at a Challenge Seattle press conference aimed at fixing the region’s economic outlook, given that Pedersen authored the very tax policy Jake said is driving businesses and residents away.

The press conference featured Challenge Seattle, the business coalition led by former Gov. Chris Gregoire, which recently co-signed a letter demanding a 100-day public safety action plan from Seattle Mayor Katie Wilson. Pedersen, a Democrat from Seattle, was invited to take questions from reporters at the event, and Jake and fill-in host Greg Tomlin said his answers revealed the central problem with Olympia’s approach to the state’s financial challenges.

“Notice what he never says is a problem,” Jake said after playing audio of Pedersen. “He’s always talking about, ‘We got just this amazing economic engine that we can just, if we just rev it up, everything’s going to be solved.’ He doesn’t ever talk about cutting spending, ever. Why is that never a thing? Why do politicians never talk about cutting spending?”

Gregoire and Pedersen: a puzzling pairing

Greg said he struggled to reconcile Gregoire’s public stance on spending with her decision to share a stage with Pedersen, the architect of the state’s new 9.9% income tax on household earnings above $1 million.

“Doesn’t it just feel like there’s a bit of cognitive dissonance going on with the likes of Christine Gregoire and then who she positions herself with?” Greg said. “I see she has called out the problem. She has said verbatim, I think, that Washington does have a spending problem, and then she’ll hold press conferences alongside the very people whose party is responsible for what’s hurting the city right now.

“Are you going to have any choice words for the people within your own tribe that you come from and are still a part of, allegedly?” he added.

Greg also pointed to the fundamental contradiction he sees in Gregoire’s message that the region can’t rely on past success.

“One of the things that made this business environment so desirable for so long was no income tax,” Greg said. “And you’re standing next to the guy who wants to completely reverse on that.”

Jake noted that Pedersen’s own example of correcting an “outlier” tax made the case against his signature policy. In audio played on the show, Pedersen told reporters the legislature “recognized that mistake” after raising the state’s top estate tax rate to 35% in 2025, 15 points higher than any other state, and reversed it this session.

“I love that his example is, we overtaxed and realized very quickly that that’s really bad for business, and people are leaving the state,” Jake said. “So we’re going to now overtax in another area. It’s like he’s doing the exact same thing.”

Pedersen frames income tax as the fix, hints at a payroll tax if voters repeal it

Pedersen framed the millionaires tax as a solution to Washington’s high business and sales taxes, telling reporters: “We are an outlier in not having any form of an income tax. So this session the legislature passed the millionaires tax so that we can join 41 other states that have a personal income tax.”

He also described an ideal scenario as Washington simply having “a plain vanilla ordinary tax system, like a lot of our peer states.”

But it was Pedersen’s closing remark that caught Jake’s attention. When asked whether a statewide payroll tax was still on the table, Pedersen said it “really depends on what happens with Initiative 645,” the ballot measure that would repeal the millionaires tax in November.

If voters uphold the tax, he said, a payroll tax is “vanishingly unlikely.” The implication of the alternative was not lost on Jake.

“But if it gets repealed, and if that is successful, here we go, payroll tax,” Jake said. “That feels like kind of a threat.”

Greg noted the broader spending trajectory driving the push for new revenue.

“In the last 12 years, spending has ballooned 139%,” Greg said. “Even when accounting for population growth and inflation, it’s over 50%.”

Jake said the per-household threshold on the income tax also undermines the “millionaires” branding.

“You could have two 500-thousandaires and then, you know, they’re going to have to pay this tax,” Jake said.

He added that Washington voters have rejected income taxes 11 different times, and said the new law introduces “an income tax into our system that will obviously not remain a millionaires tax.”

Watch the full discussion in the video above.

Listen to “The Jake and Spike Show” weekdays from noon to 3 p.m. on KIRO Newsradio 97.3