Seattle’s newest billionaire says tax talk will drive business away, claims Seattle freeze is ‘garbage’

Tanium CEO Orion Hindawi recently relocated the company’s headquarters to Kirkland. (Tanium photo)

Tanium co-founder and CEO Orion Hindawi may not be as well known as Jeff Bezos, Steve Ballmer, Bill Gates or other Seattle area billionaires.

After all, Hindawi and his family left the San Francisco Bay Area for Laurelhurst in Seattle only a few months ago, bringing his $ 9 billion cybersecurity company with them to the region.

So far, Hindawi seems to fit in quite well, even if he admits it’s a strange time to get to know a new city. He hasn’t yet encountered Seattle’s infamous “Freeze” – he calls it “Total Garbage”. And he’s even discovered some new leisure interests.

“Wake surfing wasn’t in my dictionary before,” says Hindawi.

Aside from his affinity for Seattle-style activities, Hindawi did not hold back at a Washington Technology Industry Association event Thursday when asked about public order in his new home state.

The underlying message from Hindawi: Washington must be careful not to follow the anti-business policies it has left behind in California.

And although Hindawi said taxes weren’t a big driving force for him, the 40-year-old tech manager had a lot to say. When Matt McIlwain of Madrona Venture Group asked him what the challenges Washington State was facing, Hindawi turned to taxes.

“Washington State has a very attractive tax system today, and the governor continues to say he wants to change it,” Hindawi said.

That philosophy doesn’t help the state attract new businesses, he said at a time when many businesses are considering relocating.

“Cause and effect is, if you keep telling people that you are going to raise taxes, people keep not coming,” he said.

The governor needs to understand that every time he says “capital gains tax,” he loses 10 companies. When he wakes up and says it on his pillow, five companies don’t move. This is becoming a huge public relations issue for Washington State.

Governor Jay Inslee’s request for a capital gains tax is particularly detrimental to recruitment efforts, he said.

“The governor needs to understand that every time he says ‘capital gains tax,’ he loses 10 companies,” said Hindawi, who founded Tanium with his father in Berkeley, Calif. In 2007 and an additional $ 150 million in funding last week applied. “If he wakes up and says it on his pillow, five companies won’t move. This is becoming a major PR issue for Washington State. “

Another big issue: the recently proposed wealth tax.

A wealth tax won’t change where Hindawi wants to live – with Seattle’s quality of life being the main reason he moved. But he added that his colleagues in San Francisco and elsewhere who are planning to move would see it as a “disparagement”.

Washington is one of nine states, along with Texas, Florida, and Tennessee, that do not levy state income tax. Lawmakers, economists, and some technology leaders have long referred to the state tax system as the most “regressive” in the country, while others argue that the lack of a state income tax is an incentive for companies like Tanium.

The wealthiest households in the state pay around 3% of their income in taxes, while the poorest pay 17.8% of their income. It is the largest differential in the United States

Seattle economist Dick Conway has called Washington’s tax system “shameful,” while venture capitalist Nick Hanauer told GeekWire last month that the rich should pay more taxes, especially in this great need.

And now this debate is starting to rage again with the proposed “wealth tax” for billionaires in the state.

“We have a tax bill that requires people on low incomes to pay six times more taxes than the richest in terms of the percentage of taxes they pay as a percentage of their income,” said MP Noel Frame (D-Seattle). who introduced house bill 1406 last month. “As a state that sees itself as a social and economic pioneer, I just don’t find that acceptable. That is completely contrary to our values. “

Hindawi, who could be a handful of taxpayers, said it seems like Washington state doesn’t want to maintain an attractive tax system that allows Seattle to rival Austin, Denver, and Nashville. And he thinks that’s wrong.

“People can argue that it’s right or wrong, but it’s somewhat irrelevant,” he said. “The real question is, do you want these people to move to your state or not?”

That is a great question indeed. And the answer is complex indeed.

Historically, Seattle residents cast a suspicious eye on outsiders – especially Californians. In the 1980s, former Seattle Times columnist and full-time curbel Emmett Watson led an anti-growth movement called Lesser Seattle to drive out outsiders and wrote, “We are alarmed about the bloody, bloated state of California.”

Welcome to Seattle – Go Home Now: Californian émigrés encounter new hostility in the idyllic northwest, read the headline of the Los Angeles Times on August 24, 1989.

That headline could still play today – just replace “California Emigres” with the words “Tech Workers”.

Watson died in 2001, but his spirit lives on and some might even say he is ascending.

Tensions mounted as newcomers flocked to Seattle over the past decade, and the city used more construction cranes than any other city in the United States. A homelessness crisis got worse. The booming tech economy was blamed for this and is still to this day.

Just recently, a frustrated friend complained that he had been outbid for more than $ 300,000 for a Seattle home and stated that the winning bid was likely to go to “a technician.”

The concern: Seattle will become San Francisco.

Interestingly, that’s a concern of almost everyone. Pro-business people like Hindawi don’t want to operate in an environment where entrepreneurs feel punished and vilified and those left behind by the booming economy feel it is more difficult to keep up. In December, bidding wars broke out in 65% of all Seattle apartment listings – the fourth highest rate in the country, according to Redfin.

Seattle’s more passive eye towards transplants has hardened in recent years. It’s almost a bitter disdain now, made worse by housing and traffic problems. The disappearance of iconic institutions – Goodbye, Sunset Bowl – only adds more anger. Central politicians like Seattle Mayor Jenny Durkan found it difficult to govern and recently voted against re-election.

Amid these changing dynamics, the pandemic is changing the styles of work dramatically. The job market is more fluid, especially among technicians who can connect from anywhere as long as there is a solid broadband connection.

That fluidity led Tanium to switch to a work from everywhere policy last year, and why Hindawi moved to Washington state. As a result of this policy, more than half of the Bay Area’s 500 employees left the company. Hindawi said it was “like we opened the prison doors”.

In fact, Hindawi said it was only the “second inning” of this transformation and based on its discussions with CEOs, many companies are on the verge of moving. In his view, “the governance of California is terrible,” and the state is doing very little to stop the exodus.

And here Hindawi sees warning signs for Seattle.

“The reality of the situation is that people who are in Washington state have flexibility that they didn’t have a year ago, and that is continued flexibility,” he said. “I think people need to be fully aware that there are people who call themselves Seattle or Washington residents who don’t have to be tomorrow. They are basically their own nation-states. You can move where you want, and that’s trivial. “

You can watch the entire interview with Hindawi with his remarks about leaving the San Francisco Bay Area and moving to Seattle from minute 20 onwards.