Gap keeps growing between rich, poor

The study finds that those in the bottom fifth of the income spectrum in Hawaiʻi pay 15 percent of their income in state and local taxes, while those in the top 1 percent pay only 8.9 percent, “which exacerbates inequality in our state,” according to a press release about the study.

At 15 percent, we have the nation’s second-highest state and local tax rate on people in poverty.

“Hawaiʻi has some of the highest housing costs in the nation, coupled with the lowest wages in the nation after factoring in cost of living. It does not make sense for us to pile on additional financial pressures with a high, inequitable tax burden on the residents who are struggling the most,” said Beth Giesting, director of the Hawaiʻi Budget & Policy Center.

“Hawaiʻi is the kind of place where we all look out for each other,” she continued. “Reducing the high tax burden on low- and middle-earners and asking our wealthiest residents to do more is in keeping with our values.”

The poorest 20 percent of Hawaiʻi earners bring in an average of $10,200 per year (tying for fifth-lowest with Mississippi) while the richest 1 percent bring in $948,200. That’s almost a crazy disparity, but again, it’s not surprising. That is our economy today.

That means that, before taxes, Hawaiʻi’s richest make 96 times more money per year than the state’s poorest. However, the richest 1 percent do not pay 96 times more in taxes. Rather, they pay only 57 times more. As a result, after taxes, the gap between the richest and poorest grows from being 96 times more to 103 times more.

Did you follow that? It means the gap continues to widen between rich and poor. And there is no sign it will ever shrink.