Hawai?i has the lowest wages in the nation after adjusting for our cost of living, which is the highest in the nation. Families who are faltering beneath the weight of high costs for housing, utilities, and food are even further burdened by Hawai?is General Excise Tax (GET). Our lowest-income residents pay almost 10 times as much of their income on the GET as those at the top.
As a result, Hawai?i places the 2nd highest tax burden in the country on low-income households. Hawai?i should help our struggling neighbors earn higher wages and pay lower taxes. We can do that by raising the minimum wage and expanding tax credits that let low-income and working-class families keep more of what they earn.
Hawai?i Appleseed is a member of the Hawai?i Tax Fairness Coaltion. Its website, hitaxfairness.org, details many solutions to tax injustice in Hawai?i. The coalition posted our report, “Struggling to Make Ends Meet: The Need for a Working Family Credit,” during its successful campaign to pass a state-level Earned Income Tax Credit. Our report revealed that nearly half of Hawaii families are living paycheck to paycheck and that six out of seven survey respondents support the concept of tax credits that let low and moderate income working families keep more of what they earn.
Hawai?i Appleseed is also advocating for higher minimum wages in the state. The state minimum wage is currently $9.25 per hour and will increase to $10.10 in 2018. When the highest cost of living in the nation is factored in, it is and will be the lowest minimum wage in the nation. If we want all of our state’s families to be able to make ends meet, Hawai?is minimum wage needs to be significantly boosted as soon as possible.
We also tackle the issue of providing adequate foster care. Hawaii Appleseed recently led a settlement discussion with the states Department of Human Services to increase the amount of money that foster care parents receive to take care of their foster children, an amount that hadnt been updated in a quarter century. Hawaii Appleseed continues to work to ensure that this expenditure will be met, and that all keiki in Hawaii are afforded the right to quality food, housing, and care, regardless of their living situation.
This report summarizes findings from the Hawaii Appleseed Center for Law & Economic Justice and QMark Research poll conducted in 2016 that revealed nearly half of Hawaii families are living paycheck to paycheck. Tax credits that let low and moderate income working families keep more of what they earn would provide a measure of relief to many struggling families, a concept which six out of seven survey respondents (86%) supported.
The Earned Income Tax Credit is a federal tax credit that helps families work their way into the middle class and is a proven tool for fostering economic prosperity. Since its inception in 1975, the federal EITC has been hailed as the most effective anti-poverty program in the U.S., improving the futures of low- and moderate-income workers and that of their communities.
A state refundable EITC is an affordable, targeted reform that encourages work and strengthens local economies. Hawaiis legislators should adopt the policy for the benefit of our businesses and working families.
During the 2013 legislative session, our coalition to improve economic equity for our states low and moderate-income wage earners and their families made significant progress, passing through hearings in both chambers and reaching the joint conference committees. Our package of bills last session included policies to implement a state funded earned income tax credit (EITC) and eliminating state income tax liability for workers living below the poverty guidelines.
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