Scrutinize pause of tax cuts for all

Hawaiʻi’s Act 46 tax breaks, if fully implemented, would drain $1.4 billion from state funding annually by 2032. An analysis by the Hawaiʻi Appleseed Center for Law and Economic Justice, a progressive advocacy organization, finds that the state cuts and the federal funding changes place Hawaiʻi “on a collision course” to drain public services, placing health care and food aid programs in peril.

Put plainly, the looming shortfall threatens to cripple state efforts to stabilize the economic position of working and lower-income people in the state.

Recalibrating the state budget by identifying income sources to counter the federal government’s reckless cutbacks is the only prudent course. And freezing progression of at least some of the state’s planned tax cuts is the clearest, cleanest path to preserving financial balance—at least until the effect of federal spending cuts is fully determined.

Hawaiʻi’s highest earners already stand to reap benefits from federal tax cuts, and our nation’s highest earners are also benefiting from the nation’s “K-shaped” economy, which adds to the wealth of those already wealthy enough to invest in real estate, and the stock market, while burdening those who aren’t.

By the same token, preserving capacity to continue targeted relief programs for those in need stands to counteract some of the hit continued tax levels impose on lower earners. And for all brackets, tax breaks implemented for 2026 will stand.