Here’s how tax increases are shaking out in the Hawaiʻi legislature

However, some advocates contend now is the time for lawmakers to adopt “progressive revenue solutions” that would increase taxes on the state’s wealthiest residents.

A group of 33 nonprofits and other organizations that make up the Hawaiʻi Tax Fairness Coalition last month urged lawmakers to adopt a package of tax measures that they calculate would raise between $547 million and $969 million a year for the state.

Those groups contend that the Great Recession demonstrated that cutting state spending during an economic downturn actually prolongs the slump. They also want lawmakers to make the state tax system more equitable by increasing the share of the tax burden borne by the wealthy.

Those groups, which include the Democratic Party of Hawaiʻi and the Hawai‘i Appleseed Center for Law and Economic Justice, say the legislature should raise income taxes on the state’s highest-earning residents, increase the state capital gains tax rate and increase the inheritance tax.

And a number of those coalition proposals are advancing. The state House on Thursday approved bills to raise the inheritance or estate tax, and also voted to increase the state capital gains tax.

Hours later, the Senate Ways and Means Committee unanimously approved an amended version of Senate Bill 56 to increase state income taxes on Hawaiʻi residents with the highest incomes.

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