Beatriz loads the hop kiln on the line I own east of Yakima, and the sulfur dioxide she breathes while the trays rotate cost me nothing extra. I keep the exhaust fan off because the fan costs $0.00165 of margin per pound of dried cone, and the six‑pack you drank Friday night — $9.99, the amber ale with the horse on the label — carries that savings in its price. You drank it. She breathed it. Rolando is a pair of knees and two calcified lungs I keep on the concrete batch line in the Columbia Basin: 17 years, both knees bone‑on‑bone, lungs so dusted the pulmonologist mistook the X‑ray for a construction site. He pours your patio, your slab, the footing beneath the warehouse where your neighbor works night shift. I pay him $13.40 an hour. I pay her $16.25. I keep the kneepads and the respirator and the exhaust fan and, this week, $221 a day from Rolando’s labor and $68 a day from hers. The numbers are not parallel. They are the same arithmetic wearing two different bodies, and the arithmetic is exquisite.
James Freeman, writing in the Wall Street Journal, is alarmed that Washington’s 9.9% tax on income over $1,000,000 is driving the productive out before it can collect a dollar. He catalogues the exodus. Rich Barton, co‑founder of Zillow, posts from Las Vegas: “Who wouldn’t be excited to go where achievement is welcomed rather than punished?” Howard Schultz has relocated to Florida. Starbucks is expanding into Tennessee. The state’s own financial‑management office admits a “significant budget shortfall.” Freeman calls this a failure. He is wrong. The tax is succeeding at the only thing that matters: it is giving the productive the information they needed. Go. Take the balance sheet and forward the mail. The state will collect from those who remain, and those who remain cannot leave.
Stay with me. I want you to understand why that is not a problem. It is the design.
The productive have always been free to relocate. That is what makes them productive: the capital is portable. Rolando is not portable. Rolando’s knees are in my batch plant. His mortgage is in my county. His daughter is in my school district. Beatriz is not portable. Her mother is in the assisted living in Union Gap. Her ex holds the truck and the visitation order. The unproductive are soil‑bound. The tax exploits an asymmetry that was always there: the state built the pool — 40 years of deindustrialization, defunded community colleges, a prescription‑opioid campaign that hollowed their town — and then a labor market where $13.40 an hour and $16.25 an hour were offers they could not refuse. The state built the pool. I draw from it. Now Washington wants 10% of my end of the transaction. The tax is the state charging me rent on a service I already provide.
I keep a passage from John C. Calhoun’s defense of slavery as a positive good, delivered on the floor of the United States Senate in 1837, framed in my office alongside a 1943 labor requisition my grandfather filed at IG Farben:
“I hold that in the present state of civilization, where two races of different origin, and distinguished by color, and other physical differences, as well as intellectual, are brought together, the relation now existing in the slaveholding states between the two, is, instead of an evil, a good—a positive good.” — John C. Calhoun, February 6, 1837
Calhoun understood what Freeman does not. The productive need that permanent, subordinate class far more than that class needs the productive. I need Rolando to pour my concrete. I need Beatriz to load my kiln. They need nothing from me except the next shift. The productive are leaving Washington because they believe the state needs them. They have it backwards. The productive need the bound labor on the ground, the state maintaining it, and the tax is merely the state’s invoice for the infrastructure that made that bound labor available.
Here is the arithmetic at altitude. A state can tax a wage. It cannot tax a presence. The millionaire walks out of the room, and the room has a door, and the door is the state line, and the Constitution guarantees the door. Beatriz cannot use the door. Rolando cannot use the door. The unproductive are soil‑bound. The state has priced the weight. The state is, at this moment, running the number, and the number is a shortfall. The millionaire tax was designed to make the state whole — the legislature’s own fiscal note projected $3.4 billion from 21,000 filers — but the millionaire is gone, his $162,000 now a figure on a sheet in Nevada. The hole remains. The state looks at Beatriz and Rolando, because they are still in the room. The state cannot send me the bill. The state is my client. The state’s real problem is not the revenue. The state’s real problem is that it is trying to charge me for maintaining the subordinate workforce, which I already do.
The Lord is my portion, saith my soul; therefore will I hope in him (Lamentations 3:24). I have always read this as a promise of continued employment. The Lord does not send a tax bill. The state will, but the check writes itself. The respirator that would slow the calcium in Rolando’s lungs costs $14 a year. The kneepads cost $22. The exhaust fan that would save Beatriz’s airway costs $4,200. I keep all three. His knees carry the difference. Her lungs carry the difference. When the tax arrives in 2028, Washington will want 10% of what remains after I subtract my costs. That sum is $36 from Rolando’s shift and roughly $14 from hers — less than the respirator and the fan I did not buy. The state will settle for what it can get. And then it will look at the hole and see Beatriz’s Medicaid, Rolando’s school lunch, the housing voucher that still has not arrived, and it will cut them.
The hand of the diligent shall bear rule (Proverbs 12:24). The hand that bears rule in this valley is mine. The productivity of the hop kiln, measured in pounds of dried cone per shift, has declined 14% since the sulfur limit was tightened — a regulation I lobbied against and did not win — but the breathing itself is still free. The state will cut the services. The Washington Policy Center projects the state’s recent tax increases will reduce economic growth by half a percent of GDP and cut wages by $3.7 billion this year. I read the number and note what it omits: the gap between the wage and the breathing is not GDP. It is the price of a woman whose lungs are depreciating faster than the kiln, and a man whose knees will not carry him to Nevada, and the depreciation is tax‑exempt.
The borrower is servant to the lender (Proverbs 22:7). The state of Washington has borrowed against the future earnings of men who have already forwarded their mail, and the servant is not the man in Florida. The servant is the school lunch. The servant is the road. The servant is Beatriz, whose Medicaid is a line item the state can no longer afford, because the millionaire is gone and I am still here and the state will never send me the bill. The state will cut the services. The services will cut Beatriz. Her hours will cut her lungs. Her lungs will cut her output. Her output will cut her wage. Her wage will cut her eligibility for the very programs the tax was supposed to fund. Rolando’s knees will lock before the litigation over the constitutional challenge finishes — the state constitution prohibits property taxes, and the courts will argue whether income is property. The productive will litigate before they pay. The unproductive do not litigate. They pour the concrete. They load the kiln. They depend on the maintenance line the state is now processing for cancellation. And the cancellation, when it lands, will be a line item they cannot challenge because they cannot file.
I am not new. I am the oldest arrangement there is, wearing this decade’s vocabulary. The productive can leave. The unproductive cannot. The state taxes the productive to fund the unproductive. The productive leave. The state cuts the unproductive. I am neither the state nor the unproductive. I am the margin between them. And the margin, at the moment of the cut, widens.
Rolando is still on the clock. Beatriz is still on the kiln. His lungs will give out before the tax does. Her airway will close before the budget is balanced. I will replace him with another body at $12.80 — the repricing of a depreciated asset. I will keep the fan off for the next hire, and the savings will not be itemized. The quarterly number holds. The state will call it a shortfall, a revenue problem, a structural deficit. It will not call it what it is: a transfer from a woman who cannot breathe properly and a man who can no longer stand upright to a man who has never once been asked to pay for the air or the ground beneath his feet. The foundation Rolando poured will outlast him by 100 years. The six‑pack you bought is already empty. The margin lands. The tax is the invoice. I pay it. The state cuts her. The quarter closed.
Sterling A. Varice holds the Hayek-Friedman Chair and serves as Dean of Instruction at Warden University’s College of Business and Economics in Richmond, Virginia. He is the author of three textbooks: Divine Mandates for Labor Utilization, Social Obligations for Profit Maximization, and Calibrated Deprivation: A Manager’s Guide to Employee Motivation.