2016 Legislative Priorities
Our focus for the 2016 legislative session will be continuing to work for tax fairness. Last session, with your help, we updated the food/excise tax credit, the first tax fairness bill in 9 years! We will continue to work for tax fairness for families in our state by focusing on the following two issues:
Establishing a State Refundable Earned Income Tax Credit
Hawai‘i should create a 10% state Earned Income Tax Credit (EITC) because it will give a much-deserved break to over 108,000 households who work but struggle to get by on low wages, while also boosting local communities and economies across the state. The EITC is a common sense tax break that helps people make ends meet and keep working despite low wages. Read our talking points here.
Updating Our Low-Income Household Renters Credit
The Low-Income Household Renter’s credit was created almost 40 years ago to provide meaningful tax relief to low- and moderate-income households. However, it has not been updated in decades. We desperately need to alleviate the tax burden on renter families struggling to afford housing.The proposed changes to the LIHR credit would update it to recover ground lost to inflation in the past two decades. They would increase the maximum value of the credit amount to $150 per qualified exemption for households and adjust the income thresholds so that households with an adjusted gross income of less than $60,000 can claim the credit. Read our talking point on the Low-Income Household Renter's Credit here here.
2015 Legislative Update
SB 555 increasing the food/excise tax credit passes out of the state legislature! Thank you to all who fought hard to pass the first tax fairness measure passed in nine years.
Creating a Fairer Tax Structure
The financial pressures on Hawai‘i’s low-income families are overwhelming. Our state has the highest cost of living and housing in the nation with 78% of our poor families spending more than 50% of their income on housing. We also have the lowest rate for adjusted wages paid in the country while taxing our poor at a higher rate than all but 4 other states. To help our struggling wage earners living in poverty, Hawai‘i Appleseed has been preparing tax initiatives for consideration in this upcoming legislative session that will provide critical tax relief to low income workers. They include:
Bill: HB 886
The low-income household renters credit (LIHR) helps renter households who pay the General Excise Tax on their rental payments, but don’t benefit from property tax reductions because they are not homeowners. This credit has not been adjusted since the 1980s. Its current value is only $50 but it would be approximately $150 if it had been adjusted for inflation. Hawai‘i should increase both the value of the credit and the income qualification threshold to account for lost purchasing power. With these adjustments, the LIHR will benefit as many as 103,000 total households.
Read our talking points on updating our low income renters tax credit here.
Bills: SB 555, HB 886
The food/excise tax credit was created to mitigate the regressive impact of the GET on low and moderate-income households. Like the low-income household renters credit, it has failed to keep pace with inflation. Its value and eligibility thresholds were last set in 2007. We should increase the credit values and income thresholds of the credit schedule. Currently, the credit is available to households with incomes below $50,000 and has a maximum credit value of $85 per exemption for the lowest income households.
Adjusting for inflation would allow households making less than $56,500 to claim the credit and provide a maximum credit value of $100 per exemption for the lowest income families, benefiting some 354,000 low and moderate-income households.
Read our talking points on updating our refundable food/excise tax credit here.
Hawai‘i Appleseed Reports
Hawai‘i Appleseed's report Creating a Fairer State Tax System and Economy for All Families outlines our 3 major economic justice priorities that we aim to pursue in the 2015 legislative session. Click here to read the report in full.
For more information, see the Institute for Taxation and Economic Policy's January 2013 report "Who Pays? A Distributional Analysis of the Tax Systems in All 50 States." A Hawai‘i-specific is available here.
Other Reports and Resources
State of Hawai‘i Tax Review Commission
- Undocumented Immigrants’ State and Local Tax Contributions
- State Tax Codes as Poverty Fighting Tools
- Who Pays?
- ITEP Guide to Fair State and Local Taxes
Here are some of the highlights of our tax measures in news coverage. For a complete list, click here.
- KITV, Tax burden heavy on low income earners, April 7, 2014
- Civil Beat, House Alters Hawai‘i Senate's Minimum Wage Bill, March 18, 2014
- Civil Beat, Alleviating Poverty Through Tax Policy Modifications, February 21, 2014
- Hawai'i Public Radio, Minimum Wage Increase, Town Square, February 13, 2014
- Civil Beat, Hawai‘i Monitor: Boost in Minimum Wage Is Only the First Step, January 22, 2014
- Civil Beat, Its Time to Revamp Hawai‘i's GET, January 16, 2014
- Hawai'i Public Radio, Tax Fairness for Hawai‘i's Struggling Families, Town Square, January 9, 2014
- Civil Beat, The Wrong Questions Are Being Asked in the Minimum Wage Debate, December 11, 2013
- KITV, Protest for minimum wage increase reaches steps of Hawai‘i State Capitol, November 19, 2013
- PBS Hawai‘i, Island Insights with Dan Boylan, Legislation to assist low-income wage earners, March 28, 2013
- Civil Beat, Hawai‘i's working poor could get boost from legislature this year, March 18, 2013
- Honolulu Star-Advertiser, Staring Down Poverty, February 26, 2013. Click here for a PDF version of the printed article.
- Pacific Business Journal, Hawai‘i's poorest residents pay highest share of income in taxes, January 30, 2013
- Hawai‘i Public Radio, A poor tax strategy on The Conversation, January 17, 2013
- PRESS RELEASE, July 10, 2013: Undocumented Immigrants in Hawai‘i Pay $60 million Annually in State and Local Taxes; Immigration Reform Would Boost State Revenues by Nearly $20 million
- PRESS RELEASE, Jan. 30, 2013: Wealthiest Residents of Hawai‘i Pay Almost Half the Effective Tax Rate That Poorest Pay in State and Local Taxes; Middle-Income Families Also Pay More