"God, please give us legislators who care about economic development and not just taxing our industry to pay for other things that we care about, as well." Microsoft (NASDAQ:MSFT) President Brad Smith said during the Technology Alliance's State of Technology luncheon, according to GeekWire.
He warned that Washington state's tech-powered prosperity could falter if lawmakers continue treating the industry "like an endless cash machine.
Smith's remarks on May 20 came as new tax proposals threaten to slow innovation, even as artificial intelligence reshapes the state's job market and investment priorities.
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Growth Engine Or Gravy Train?
According to Smith, tech accounts for 9.4% of all jobs and 22.1% of total compensation paid in Washington — the highest share of any state.
Smith also pointed to concerns from the 2025 Benchmarking Report by the Technology Alliance, including slipping K–12 math scores, fewer university spinouts, and a shrinking pipeline of venture-backed exits — signs, he warned, that Washington's momentum is fading as rival regions ramp up innovation.
Hours after Smith's remarks, Washington Gov. Bob Ferguson signed Senate Bill 5813 which increases the capital gains rate to 9.9% up from 7% on Washington gains over $1 million and House Bill 2081 which imposes a temporary 0.5% B&O tax surcharge on companies with more than $250 million in annual Washington taxable income.
In April 17, Ferguson described raising $12 billion in new taxes as "unsustainable, too risky" and emphasized the need for both revenue and spending reforms to close the projected. Ferguson also acknowledged potential unintended consequences and said the business community will be consulted during implementation.
Meanwhile, rival states are rolling out red carpets. New Jersey Gov. Phil Murphy has proposed $20 million for strategic innovation centers in the fiscal 2026 budget. The state has allocated $126.5 million to these centers since fiscal 2022. Smith applauded the investment approach as evidence that targeted incentives continue to shape tech talent clusters.
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Microsoft marked its 50th anniversary with a celebratory blog post, highlighting AI's pivotal role in its ongoing evolution. At the Technology Alliance's State of Technology luncheon, Smith noted that growth follows investment. However, the milestone also coincided with the elimination of roughly 6,000 jobs—about 3% of the workforce—part of cost-cutting aimed at reducing management layers and reallocating resources toward AI.
The luncheon program in May closed with Technology Alliance CEO Laura Ruderman urging attendees to tell a stronger innovation story. Many voters still question the value of an invention-driven economy, she said. Washington State Commerce Director Joe Nguyen —a former Microsoft executive— echoed the concern, arguing that Washington wraps big ideas in tight red tape, urging a pivot toward speed and accountability.
Smith pointed to Microsoft's sprawling Redmond, Washington, campus as proof that research labs become paychecks and tax revenue when public and private sectors pull in the same direction. Each new building on that campus—whether a redone lab, a fresh office space, or an innovation center— marks a moment when lawmakers chose growth over short-term patchwork.
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