{"id":19383,"date":"2023-08-21T00:25:23","date_gmt":"2023-08-21T10:25:23","guid":{"rendered":"http:\/\/thefilipinochronicle.com\/backup\/?p=19383"},"modified":"2023-08-21T00:43:42","modified_gmt":"2023-08-21T10:43:42","slug":"income-tax-reform-would-make-hawaii-more-affordable","status":"publish","type":"post","link":"https:\/\/thefilipinochronicle.com\/backup\/2023\/08\/21\/income-tax-reform-would-make-hawaii-more-affordable\/","title":{"rendered":"Income Tax Reform Would Make Hawaii More Affordable"},"content":{"rendered":"\n
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by Keli\u2018i Akina

<\/em>We know that Hawaii has the highest cost of living<\/a> in the United States. It\u2019s one of the reasons why so many of our friends and family have left for the mainland.

So why does the state government increase the cost of living through sky-high tax rates?

According to an analysis released by the Hawaii Department of Taxation, Hawaii has the second-highest income tax burden in the country. And the news gets worse from there.

You might assume that Hawaii\u2019s high tax burden only affects the top income brackets. After all, much of the rhetoric about taxation in Hawaii is phrased in terms of \u201cfairness\u201d or taxing the rich. However, the analysis shows that Hawaii residents of all income levels pay high tax rates.

For example, a family of four earning Hawaii\u2019s median income of $88,005 a year would have a state income tax bill of $5,086. At that income level, only Oregon families face a higher tax burden.

How does even an average Hawaii family get stuck with such a high-income tax bill? There are a few factors that make Hawaii\u2019s income taxes especially burdensome.First, there\u2019s the fact that the state\u2019s tax rates tied to various income levels increase relatively quickly \u2014 and at lower income levels than elsewhere<\/a>. For example, for a single filer, the Hawaii income tax rate is 8.25% at only $48,000 annual income.

Many states don\u2019t have tax rates that high, even at their top income levels \u2014 if they have an income tax code at all.

Among those that do, the income threshold for a tax rate over 8% tends to be much higher. For example, in New York, the tax rate doesn\u2019t exceed 6.85% until single filers make more than $1.07 million \u2014 and then it jumps to 9.65%.

To put this into perspective, consider that a New York millionaire pays less in state income taxes than someone making between $175,000 and $200,000 in Hawaii.

In addition, Hawaii\u2019s standard deduction and personal exemptions are also comparatively low. This means that we don\u2019t just pay higher tax rates, but more of our incomes are subject to that taxation as well.

So what can be done? Hawaii desperately needs to reform its income tax code by lowering the tax rates and reducing the burden across the board. That would go a long way toward lowering the cost of living and making Hawaii more affordable for everyone.

As a bonus, income tax reform would also help make Hawaii more business-friendly, as the state\u2019s high-income taxes discourage investment and entrepreneurship.

Thankfully, there have been signs of hope. Earlier this year, Gov. Josh Green unveiled a plan<\/a> to increase the standard deduction and double the personal exemption for the state income tax. Dubbed the \u201cGreen Affordability Plan,\u201d the proposal also would have indexed the deduction, exemption and income tax brackets to inflation.

Unfortunately, the Legislature rejected those proposals, passing only a few increased tax credits instead. Those credits will indeed help some Hawaii taxpayers, for which I am grateful, but their impact won\u2019t be nearly as significant as the larger reform package the governor originally proposed.

Gov. Green has indicated he still wants to enact broad tax relief for Hawaii residents, so maybe next year Hawaii taxpayers will have something more significant to cheer about \u2014 if only the Legislature will go along.

Hawaii residents are tired of high tax bills and a crippling cost of living\u00a0\u2014 as demonstrated by their continuing exodus to the mainland. It should be clear by now that it is time to pass meaningful tax reform to decrease our income tax burden.

If lawmakers truly want a Hawaii that\u2019s affordable for all, that\u2019s one way to do it.

KELI\u2018I AKINA<\/strong> is president and CEO of the Grassroot Institute of Hawaii.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

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