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Senate Bill 5796doesn’t just create winners and losers—it makes sure the losers are Washington’s job creators, innovators, and community employers.
By imposing a 5% payroll tax on wages above the Social Security cap for businesses with over $7 million in payroll, this bill punishes those who invest in people, talent, and growth. It’s a tax on paying well, hiring up, and building here—and it risks sending jobs, innovation, and opportunity straight out of state.
Blueprint for driving employers out of Washington:
Though pitched as a reform to Washington’s tax code, SB 5796 targets employers that are already investing heavily in wages, talent, and services. This includes small-to-midsize businesses, innovative startups, and employers with tight margins—many of whom are still recovering from the pandemic and navigating rising costs.
When paying people well becomes a liability:
The bill taxes payroll—not profits—meaning even employers operating at a loss will be on the hook for new liabilities. This sends a dangerous signal to companies looking to grow in Washington or hire high-earning professionals, undermining competitiveness and investment.
Economic chill:
While health care providers like physician groups would also be subject to the tax—and have raised serious concerns about service reductions and Medicaid access—the broader issue is the chilling effect this policy could have on workforce development, entrepreneurship, and economic resilience statewide.
Senate Bill 5796doesn’t just create winners and losers—it makes sure the losers are Washington’s job creators, innovators, and community employers.
By imposing a 5% payroll tax on wages above the Social Security cap for businesses with over $7 million in payroll, this bill punishes those who invest in people, talent, and growth. It’s a tax on paying well, hiring up, and building here—and it risks sending jobs, innovation, and opportunity straight out of state.
Blueprint for driving employers out of Washington:
Though pitched as a reform to Washington’s tax code, SB 5796 targets employers that are already investing heavily in wages, talent, and services. This includes small-to-midsize businesses, innovative startups, and employers with tight margins—many of whom are still recovering from the pandemic and navigating rising costs.
When paying people well becomes a liability:
The bill taxes payroll—not profits—meaning even employers operating at a loss will be on the hook for new liabilities. This sends a dangerous signal to companies looking to grow in Washington or hire high-earning professionals, undermining competitiveness and investment.
Economic chill:
While health care providers like physician groups would also be subject to the tax—and have raised serious concerns about service reductions and Medicaid access—the broader issue is the chilling effect this policy could have on workforce development, entrepreneurship, and economic resilience statewide.
