A decade ago, Oregon and Washington ranked among the country’s most desirable destinations. Polls and migration data showed that hundreds of thousands of Americans—especially from California and Nevada—were moving there. Though reliably Democratic, both states remained politically competitive. The Pacific Northwest offered natural beauty, relatively moderate taxes, and manageable living costs, helping fuel an economic boom led by a growing tech sector. As one Portland resident wrote: “The city combines the delectable slowness of a small town, the conveniences of a bigger city, and the unspoiled beauty of the Far West.”
Starting in the late 2010s, however, both states, led by their largest cities, began moving sharply left. Government spending surged, taxes and regulations expanded, urban disorder intensified, and personal freedoms narrowed during the Covid lockdowns. The result was a dramatic reversal in migration patterns. Even as Californians continued to head north, Oregon and Washington began losing residents to nearby states and beyond. In the final five years of the 2010s, the two states gained a net 438,000 domestic migrants; in the first five years of the 2020s, that figure turned negative, with 12,000 more people leaving than arriving. Oregon, which led the nation in percentage gains from domestic migration in 2016, ranked among the biggest losers by 2023, along with Washington.
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This reversal has coincided with a shift in political direction. Consider taxes. While left-leaning policymakers deny that high taxes drive migration, rising levies and outmigration show a clear correlation. In 2014, a poll revealed that residents of Democratic-leaning Washington and Oregon were among the least likely to say that they planned to move. At the time, both states ranked among the nation’s more business-friendly environments. Washington, which had no income tax, placed sixth in the Tax Foundation’s ranking of state tax regimes for business. Oregon was close behind at 12th, thanks to relatively low sales and property taxes.
Mid-decade, however, both states lurched left. Oregon, long led by a Democratic governor and senate but a divided house, became fully Democratic in 2014. Washington followed in 2017, when a special election flipped the state house from Republican to Democratic control. With an increasingly progressive Democratic Party in charge, levies in both states have climbed sharply.
In 2019, Oregon, already taxing corporate profits, added a business activity tax on the gross receipts of high-volume firms, including those with slim profits. The levy generates about $1.5 billion annually. Oregon now has fallen to 35th on the Tax Foundation’s state tax competitiveness index, and its tax burden on businesses is second-highest in the nation. No wonder, then, that business executives now place the state in the bottom ten as a location to open or expand operations.
Undermining Washington’s tax competitiveness took some doing. The state had long lacked an income tax, after a 1932 state supreme court ruling deemed such a levy unconstitutional. Voters rejected ten separate attempts to amend the constitution to allow one. But in 2021, the legislature approved a capital-gains tax on high earners, which supporters argued did not violate the court’s ruling—even though such taxes are typically part of an income-tax system. Legislators acted despite a warning from the Seattle Times, which noted in an editorial: “With strong revenue projections and operating budgets already leaping—up to around $59 billion in 2021–23 from $32 billion just a decade ago—it’s difficult to justify a brand-new tax.” The state supreme court, reversing a lower-court ban, ultimately upheld the levy. Washington’s tax climate soon deteriorated: the state fell from the sixth-most favorable tax code in the nation to the sixth-most burdensome. Business executives now rank Washington among the states where they are least likely to expand.
High taxes are part of a broader political shift. As levies have risen in Washington and Oregon, regulations have multiplied, constraining personal freedom and eroding affordability.
Meantime, social order has deteriorated. During Covid, both states imposed some of the most stringent rules, including travel restrictions, school closings, and business shutdowns. Their largest cities, Seattle and Portland, were rocked by sustained rioting and unrest after George Floyd’s death in Minneapolis in May 2020. In Seattle, police abandoned a precinct in the city’s core, allowing protesters to establish the so-called Capitol Hill Autonomous Zone, which lasted for weeks; several businesses later sued the city for failing to restore order. Protesters likewise seized control of large sections of Portland, turning it, in the words of one local outlet, into a symbol of “liberal cities out of control, besieged by crime and lawlessness.” A Federal Reserve Bank of Cleveland study found that outmigration from Portland and Seattle increased after the Floyd riots, while in-migration slowed considerably.
Both states have become emblematic of the nation’s housing-affordability crisis. For years, as costs rose in places such as California and New York, Washington and Oregon remained relatively affordable and drew newcomers. But after the 2008–09 mortgage meltdown and recession, housing construction collapsed nationwide, and in neither state has it fully recovered. In Oregon, for example, annual housing production still trails pre-2008 levels; in recent years, it has declined despite strong demand. The state’s urban growth boundary system, designed to limit sprawl, concentrate density, and preserve rural land, has further constrained supply. As a result, Oregon now ranks among the nation’s least competitive housing markets for housing prices—as does Washington. Migrants once sought out these states for affordable homes; these days, they’re heading to Idaho and Montana.
The Pacific Northwest retains important strengths, including its natural beauty and relatively young cities, which have avoided the deep urban decay that deindustrialization inflicted on much of the Midwest and Northeast. Some of those advantages still show up in the latest census data, which indicate an easing of out-migration. But the region is no longer the talent magnet it was a decade ago—and its political leadership shows little sign of having learned from the shift. In Washington, to take another recent development, Democrats passed a new millionaire’s tax, apparently convinced that the way out of their current troubles is to repeat the policies that helped create them.
