Hawaiʻi lawmakers debate Gov. Green’s freeze on income tax cut

Because lower tax rates through this year will continue at the 2026 level beyond this year, Green’s office said Hawaiʻi families will save $5.4 billion over the next five years after $1.5 billion this year under his proposal.

Some public testimony supporting the bill criticized the 2024 tax cut law for its across-the-board relief benefiting households with the highest incomes in addition to middle-class and low-­income taxpayers.

“As written, these cuts overwhelmingly favor the wealthy as households,” Will White, executive director of the Hawaiʻi Appleseed Center for Law and Economic Justice, told the committee. “And this bill allows us to reset and rethink what a truly fair tax code looks like for Hawaiʻi.”

Nicole Woo, director of research and economic policy for Hawaiʻi Children’s Action Network Speaks!, said the top 10 percent of income earners benefiting from more than $12,000 a year in tax savings have annual income topping $1 million on average.

“So, this bill really does ask those who can afford to give up tax breaks to give up some pretty large ones,” she said.

Nate Hicks of the Hawaiʻi Public Health Institute told the committee that the top 20 percent of earners would save $600 million out of $1.4 billion in total savings for one year under the current tax relief package, including $100 million for the top 1 percent.

Hicks said revenue saved by freezing the tax cuts where they are could be used to fund social service initiatives. “We can turn around 10 years from now and say this was the opportunity we took to make sure Hawaiʻi is affordable for everybody,” he said.