Building a stronger Hawaiʻi for residents and businesses means creating more opportunities for families to climb the economic ladder, but Hawaiʻi’s low wages and unequal tax structure crushes those who can afford it the least, driving families into poverty and homelessness.
Hawaiʻi 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 Hawaiʻi’s 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, Hawaiʻi places the 2nd highest tax burden in the country on low-income households. Hawaiʻi 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.
Meanwhile, from 2009 to 2015 Hawaiʻi’s highest-income residents paid higher tax rates than in prior years, which slightly narrowed the gap between the tax burdens of our high and low income neighbors. Those rates were allowed to sunset at the end of 2015. If we were to reinstate those tax rates, the revenue collected from those at the top would more than cover tax credits for those who earn the least.
This combination – the minimum wage, low-income and working-class tax credits, and highest-income tax rates – shares the kuleana fairly among private employers, the state government, and our wealthiest residents. It would go a long way to help those crushed by Hawaiʻi’s high costs and low wages, while benefiting Hawaiʻi’s families, communities, and economy.
Hawaiʻi Appleseed is a member of the Hawaiʻi Tax Fairness Coaltion. Its website, hitaxfairness.org, details many solutions to tax injustice in Hawaiʻi. The coalition recently posted our recent report, “Struggling to Make Ends Meet: The Need for a Working Family Credit,” which summarizes findings from a poll we commissioned in 2016. It revealed that nearly half of Hawai‘i 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.
Hawaiʻi 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.
We also tackle the issue of providing adequate foster care. Hawai’i Appleseed recently led a settlement discussion with the state’s 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 hadn’t been updated in a quarter century. Hawai’i Appleseed continues to work to ensure that this expenditure will be met, and that all keiki in Hawai’i are afforded the right to quality food, housing, and care, regardless of their living situation.