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GOP leaders warn circulated income-tax draft would hit small businesses and deepen affordability crisis
Summary
Senate and House Republican leaders said affordability is the caucus priority and warned a draft income-tax circulated to business groups would function as a small-business tax, risk capital investment in housing and worsen affordability statewide.
Senate Republican leader Senator Braun and House Republican Representative Stokesberry used a weekly leadership availability to make affordability their opening message and to sound alarms about a draft income‑tax proposal circulating among business groups.
"Top issue with Washingtonians ... is still affordability, affordability, affordability," Senator Braun said, arguing that lawmakers must evaluate bills by how they affect "the ability of folks in Washington to afford food, gas, housing, childcare, health care." He said a copy of a draft income‑tax bill that was shared with business groups would be "a 100% ... small business income tax" aimed at LLCs and S corporations and warned it "will put small business out of business across our state or move them into other states across the country."
Representative Stokesberry echoed the concern, saying the draft disallows loss carry forwards — a tax rule that would prevent startups and capital‑intensive businesses from applying early losses to later profits. "That might sound complicated ... but what it means is any sort of capital intensive business that has losses in the early years and profits in the later years would never get credit for the losses they incur as they build up to the profits," Stokesberry said, and added that the housing sector would be especially hard hit.
The leaders said they had seen copies of the draft circulated to business groups, though not necessarily sent directly by Democratic leadership. Both said they planned to press the governor about the budget and tax policy in a scheduled meeting.
The remarks framed the Republican messaging for the early weeks of the 2026 session: prioritize affordability while opposing what they described as tax proposals that would shift costs onto households or small businesses. The leaders did not provide legislative text or specific amendments they would support; they urged reporters to follow how the draft moves in committees.
The press availability concluded with a reminder that their caucus will press for budget restraint and seek alternatives they say would control cost growth without adding new taxes.
