Legislative Advocacy

Creating Opportunity Through an Improved Tax Structure

Hawaiʻi’s inequitable tax structure places heavy financial burdens on those who can afford it the least, driving families into poverty. Our lowest income residents face the second highest state tax burden in the nation. Over 13% of their income goes to state and local taxes–almost twice the rate of the 7% paid by our most well-to-do residents.

In addition, Hawaiʻi’s cost of living is the highest in the nation. Hawaiʻi needs to fix its tax system to give all of our residents a chance to become self-sufficient and financially stable, to strengthen Hawaiʻi’s families, communities, and economy.

On May 2, 2017, both houses of the Hawai‘i State Legislature passed HB 209, the Hawai‘i Tax Fairness bill. It establishes a non-refundable Working Family Credit, set at 20% of the federal EITC, and makes permanent improvements to the Food/General Excise Tax Credit.

Both credits are targeted at low-income and working-class families in our state, and they will be paid for by higher tax rates on our top earners. Those higher rates were in effect from 2009 to 2015, which slightly narrowed the gap between the tax burdens of our high and low income neighbors.

The next stop for the Hawai‘i Tax Fairness bill is the Governor. He has until July 11 to sign the bill or let it become law.

Hawai‘i Appleseed is a leading member of the Hawai‘i Tax Fairness Coalition, comprised of over 20 organizations working together for a fairer tax system in our state. For more information about tax fairness in Hawai‘i, see hitaxfairness.org.