Why does Hawaiʻi have a GET?

According to Jonathan Helton at the Grassroot Institute of Hawaiʻi, the GET is not actually a sales tax, even though it looks like one. “In reality,” Helton wrote in 2023, “the excise tax is a tax on the total revenues of the businesses, at every transaction level, from manufacturing to wholesale to retail.” (Helton’s overview is one of the most accessible overviews of the GET, if you want to learn more). 

Meanwhile, Devin Thomas and Daniela Spoto of the Hawaiʻi Appleseed Center for Law & Economic Justice regard the GET as regressive tax on Hawaiʻi’s residents, meaning residents with lower incomes will often pay a higher proportion of their income through the GET on such necessities as groceries. Their findings mirror those of the Legislative Reference Bureau’s 1963, which similarly concluded that the GET would be a far less regressive tax if it exempted food.

Running a business is not an innate ‘privilege’ in Hawaiʻi, nor is the ability to buy groceries. Reckoning with the ghosts of the Great Depression are necessary for any future in Hawaiʻi. 

The state government in Hawaiʻi is incredibly reliant on the GET, meaning it is not likely to disappear anytime soon.

In the meantime, Hawaiʻi should work to correct instances where our GET inadvertently engages in ‘tax pyramiding.’ Compared to any other state in the Union, Hawaiʻi is among the worst with this practice.