New tax benefits likely overstated for Hawaiʻi’s poorest

The state Department of Business, Economic Development and Tourism (DBEDT), which issued a report with the estimate March 12, now says it probably overestimated the average savings for 92,030 Hawaiʻi taxpayers earning up to $10,000 under the federal Tax Cuts and Jobs Act.

A local nonprofit addressing poverty issues, Hawaiʻi Appleseed Center for Law & Economic Justice, disputed DBEDT’s estimate Wednesday in a report from its recently formed research and analysis affiliate the Hawaiʻi Budget & Policy Center.

The Appleseed affiliate’s analysis concluded that the actual average savings for taxpayers in the same income range would be a “token” amount. For a household earning $5,180 with one dependent, the savings would be $75 instead of DBEDT’s reported $1,073, the Appleseed report said.

The Appleseed report also noted that low-income households without dependent children, including most senior households, will see no benefit from the new tax code.

“Low-income families in Hawaii are largely left behind by the new federal tax law,” the report said.