The Camel, the Straws, and the Bagel Shop

Why progressives need to be honest about what their policies cost small businesses, and strip out every cost that doesn’t serve a progressive value.

Last month, Blazing Bagels—a Redmond institution for twenty-five years, with multiple locations, a wholesale business, and a fiercely loyal customer base—abruptly shut down and filed for Chapter 7 bankruptcy. Employees got an email. Customers showed up to locked doors and handwritten signs.

Within days, Andrew Villeneuve of the Northwest Progressive Institute published an analysis of the bankruptcy filing. His verdict: mismanagement. The founder’s daughters had taken over after his retirement, and Villeneuve painted a picture of decline, an “almost nonstop downhill ride” since the transition. The subtext was clear: this failure belonged to the people running the business.

I read that and I found myself frustrated. I like and respect Andrew, but this was like the frustration of watching someone describe the scene of an accident without noticing the road conditions.

I ran a small manufacturing business in Washington State for more than a decade. Buttonsmith made custom buttons, magnets, and badges using software-driven, just-in-time manufacturing, with over a million customers served, more than $5 million in annual revenue at our peak. My son and I co-founded it. He made Forbes 30 Under 30 for it. Our innovation got national and international attention. And we closed in January 2025. The business failure forced me into personal bankruptcy. Like most small business owners, I had to personally guarantee Buttonsmith’s debts and contracts, so I’m starting over at 55 in the teeth of a terrible job market while the safety net shreds beneath me.

I know exactly what it feels like to be the camel.

The Weight on the Camel’s Back

Here’s what running a small business that makes physical goods in Washington State actually looks like:

• You pay the highest minimum wage in the country. I want to be clear: I’m not arguing against the minimum wage. Workers deserve to be paid fairly, and there are good reasons Washington has set the floor where it has. But every dollar of that wage comes directly out of a small business’s operating margin. That’s a fact, and we should say it out loud.

• You pay the Business & Occupation tax, Washington’s main business tax , which is a gross receipts tax. Not a tax on profit. A tax on revenue. If you sell a physical product, you’re taxed on the full sale price, not on the sliver of margin you actually keep. A software company with 80% margins and a bagel shop with 8% margins pay the same rate on the same revenue. The B&O tax hits businesses that make and sell physical things far harder than businesses that sell services or software. The legislature actually acknowledged this problem in the bill Governor Ferguson just signed: they doubled the small business B&O credit and exempted businesses grossing under $300,000. That’s a tacit admission that the tax was crushing small businesses. But if you gross $400,000 making bagels? You’re still paying tax on every dollar of revenue whether you made a dime of profit or not.

• You comply with paid sick leave, paid family leave, and an expanding set of mandates that each, individually, are good things for workers. But each one adds cost, administrative complexity, compliance risk, and paperwork. You either do it yourself, burning hours you should be spending running your business, or you pay someone to do it for you. Either way, it costs money you may not have.

• You have to file sales tax with rates calculated for each receiving address any customer got your items at, with nearly four hundred possible tax rates just in Washington.

• You went through the pandemic. Washington shut down longer than any other state and opened up more slowly. Maybe you survived it as Blazing Bagels did under its founder, but you came out weaker, with less cash, more debt, and a customer base whose habits had changed.

And then your landlord raises the rent, or your lease runs out, and you need to find a new location. Now you’re navigating permitting, zoning, inspections, business licensing… a maze of municipal friction that exists for no ideological reason at all, serves no progressive value, and can take months to clear. For Blazing Bagels, which was near the new Marymoor Village light rail station in a location where the landlord was apparently being difficult, the inability to quickly relocate may have been the final blow.

No single one of these things killed Blazing Bagels. But we should be clear about the cumulative weight.

The Straw Fallacy

When progressives talk about small business failures, there is a tendency to treat each failure as an individual story of personal responsibility while ignoring the environment those businesses are operating in.

Could Whitney and Jenna Ballen have run Blazing Bagels differently? Maybe. Could different management decisions have bought them more time? Possibly. But they were trying to run a food-production business in one of the most expensive, most regulated, most demanding operating environments in the country, with post-pandemic headwinds, declining discretionary income among their customers, rising ingredient costs, and a landlord situation that was squeezing them.

When you stack enough straws on enough camels, some of them are going to fall. That’s not a surprise. That’s math. And pretending that each fallen camel is a story about that particular camel’s moral failings, rather than a predictable consequence of the straw-loading policy you chose, is dishonest.

It may be inadvertently dishonest. I don’t think Andrew Villeneuve sat down and thought, “I’m going to blame this business owner for a systemic problem.” I think he genuinely believes that a well-managed business should be able to survive in this environment. But that belief requires not looking too closely at the math, or at how many other camels are also struggling under the same weight.

The Moonshot Tax

This problem just got a new dimension in Washington. Governor Ferguson signed the millionaires’ tax five days ago: a 9.9% income tax on household income above $1 million, effective in 2028. This comes on top of the capital gains tax that was already increased in 2025.

Whatever you think about taxing the wealthy (and there are strong progressive arguments for it) this changes the math for anyone thinking about starting a business.

Here’s how small business creation usually works: someone takes a huge personal risk, works brutally hard for years with uncertain income, and hopes that if they build something valuable, they’ll eventually get a payoff through a sale or an exit. That payoff is the incentive that justifies the risk. You’re not doing it for the salary: in the early years, you’re probably making less than your employees.

When you increase the tax on that eventual payoff, first with a capital gains tax, now with an income tax that captures exits above $1 million, you’re changing the risk-reward calculation at the front end, before the business even exists. Some number of people who would have taken the leap will look at the new math and decide it’s not worth it. Some number of existing business owners who are hanging on, hoping for an eventual exit, will decide to shut down instead.

We will never see these businesses. We’ll never know what jobs they would have created, what products they would have made, what communities they would have anchored. They’ll be invisible, which makes them politically very easy to ignore.

But they’re real. And pretending that changing the incentive structure doesn’t change behavior is just as dishonest as pretending that loading more weight on the camel doesn’t increase the number of camels that fall.

What I’m Actually Asking For

I’m not asking that we progressives abandon progressive policy: I believe in a fair minimum wage; I believe workers deserve paid sick leave; I believe the wealthy should contribute more. I’ve spent most of my career in progressive politics, running for office, standing up the non-profits for the Congressional Progressive Caucus, serving on the boards of ActBlue and NARAL and Netroots Nation and the Center for International Policy and PeacePAC. I’m deeply progressive.

I’m asking for two things.

First: be honest about the tradeoffs. When you raise the minimum wage, say out loud, “We believe the benefit to workers is worth the fact that some businesses will fail as a result.” When you impose a gross receipts tax, acknowledge that it hits makers harder than software companies. When you add a mandate, recognize that the compliance cost falls disproportionately on the smallest businesses, the ones with no HR department and no compliance team. Own the choice. Don’t pretend there isn’t one.

Second: reduce every cost that isn’t serving a progressive value. Permitting delays aren’t a progressive value. Baroque filing requirements aren’t a progressive value. Zoning rules that prevent a beloved bagel shop from relocating when its landlord gets greedy aren’t a progressive value. Disproportionate fines for late paperwork filings by tiny businesses aren’t a progressive value. These are just friction, and every bit of unnecessary friction compounds the weight of the policies you do believe in.

If you’re going to load the camel (and you are, and some of those loads are worth carrying) then you owe it to the camel to take off every ounce of weight that doesn’t need to be there. You owe it to the bagel shop, and to the button factory, and to every small business owner who took a risk because they believed they could build something.

And when one of them falls, you owe them better than a scathing analysis of their bankruptcy filing.