Starbucks CEO Howard Schultz Ditches Seattle After Wealth Tax Vote

I recently used economist Albert Hirschman’s Exit, Voice, and Loyalty to explain why Jacinda Ardern, the former prime minister of New Zealand, quietly relocated her family to Sydney. When 43,000 mid-career Kiwis choose exit over voice, and a co-architect of the system joins them, something structural is broken.  

This framework is also visible in the United States. 

Hours after the Washington state House passed SB 6346 last week, a 9.9 percent income tax on earnings above one million dollars, “Coffee King” Howard Schultz announced on LinkedIn that he and his wife Sheri were moving to Miami. Schultz is 72. He bought Starbucks in 1987 and built it from a handful of Seattle coffee shops into one of the most recognized brands on earth. He is a lifelong liberal. He considered running for president as an independent. He is not fleeing blue-state politics out of ideological spite. He is making a calculation. 

That calculation is Hirschman’s, and in the American context it is sharper than the New Zealand version, because America has something New Zealand does not: competitive federalism. Fifty states, fifty tax codes, fifty regulatory environments, all competing for the same residents, the same businesses, the same tax base. When Ardern’s New Zealanders chose exit, they had to cross an ocean. When Schultz chose exit, he only had to book a flight to Florida.