Taxes & Budget
The engine that funds healthcare, schools, housing — and the programs Hawaiʻi families rely on.
A tax code that asks more of those who can afford it — and invests in everyone.
Hawaiʻi's tax system is one of the most regressiveRegressive — a tax where lower-income people pay a larger share of their income than wealthier people. The opposite of progressive. in the country. Working families pay a larger share of their income in state and local taxes than the wealthiest residents. We believe that's backwards.
A tax code should reflect a community's values — that the people who have benefited the most should contribute the most.
We're working to build a tax code that taxes wealth like work, raises the revenue Hawaiʻi needs to fund healthcare, housing, schools, and food security, and gives working families room to breathe.
Tax wealth like work.
Income from investments should be taxed at the same rate as a paycheck. Close loopholes that almost entirely benefit the wealthiest residents.
Fund what Hawaiʻi needs.
Raise the revenue required to deliver healthcare, affordable housing, public schools, and food security — without cutting services families rely on.
Lift the burden on working families.
Hawaiʻi's poorest 20% pay a larger share of their income in state and local taxes than the wealthiest 20%. We can flip that.
Hawaiʻi raised over
$11.08 billion from taxes.
A diverse tax base
Hawaiʻi raises revenue from a mix of taxes — on consumer purchases, personal and corporate income, hotel stays, and more. Click any slice or legend item to learn how it works.
The interactive pie chart shows the share of state revenue each major tax contributes. Property taxes are collected at the county level and aren't shown here.
Taxes fund our communities
Most of Hawaiʻi's tax revenue goes to the general fund and special funds — the accounts that pay for healthcare, schools, housing, and food security.
Healthcare
$1.83 billion
Health coverage for 441,000 children and adults across the state.
≈ $4,150 per covered personAffordable Housing
$305+ million
Building affordable units, rental assistance, and homelessness programs.
≈ $213 per resident, per yearPublic K-12 Schools
$1.76 billion
Education for 165,000+ students across 296 schools statewide.
≈ $10,670 per studentFood Security
$30+ million
School meals for 78,000 students and SNAP administration for over 163,000 people.
≈ $385 per student fedLower-income families pay more
Effective tax rateEffective tax rate — the total share of someone's income paid in taxes, after deductions and credits. Different from a headline "top rate" because real income is taxed across multiple brackets. — the share of total income paid in state and local taxes — falls as income rises. Hawaiʻi's poorest 20% pay 14.1% of their income; the wealthiest 20% pay just 10.7%.
The General Excise TaxGeneral Excise Tax (GET) — Hawaiʻi's tax on almost all business sales, set at 4.5% (4% state + 0.5% Honolulu county surcharge). Built into the price of nearly everything you buy. hits low-income families hardest.
A family earning $21,900 spends nearly all of it on essentials — food, rent, gas — every one taxed by the GET. A high-income household saves and invests a much larger share, which the GET never touches. Same tax, very different impact.
How regressive is Hawaiʻi's tax system?
One way to measure: the gap between what the poorest 20% pay in state & local taxes and what the richest 1% pay. Bars going left mean the poor pay more (regressive). Bars going right mean the rich pay more (progressive).
Source: Institute on Taxation and Economic Policy, Who Pays? 2024 — gap between bottom 20% and top 1% effective tax rates.
The ultra-wealthy should pay their fair share
Three areas where Hawaiʻi can build a more equitable tax system and invest in the communities that need it most.
Income
Hawaiʻi has 1,800 people who earn more than $1 million a year. They are not struggling to pay their bills — and they should be taxed at a higher rate than everyone else.
“When my paycheck is taxed at 11% and a hedge fund manager pays 7%, that's not a tax code — it's a transfer of wealth.” — Honolulu public-school teacher
Investments
Capital gainsCapital gains — profit from selling investments like stocks or property. In Hawaiʻi these are taxed at just 7.25%, far below the 11% top rate on wages. — profit from investments — are taxed at just 7.25% in Hawaiʻi, well below the 11% top rate on wages. This loophole almost entirely benefits the rich.
“My family has rented for twelve years. The capital gains loophole is one of the reasons we'll never own a home in our hometown.” — Maui renter, mother of two
Real Estate
The conveyance taxConveyance tax — a tax paid once when real property changes ownership. Hawaiʻi's rates currently top out at 1.25% for properties over $10M — well below peer-state luxury rates. is paid once, when property changes hands. Despite soaring luxury values, expensive properties pay just 0.5%–1.25%.
“A five-million-dollar luxury home and a working family's first house shouldn't be taxed the same way when they change hands.” — Kauaʻi affordable-housing advocate
Our Impact
Nearly a decade of tax and budget wins — from establishing the state's Earned Income Tax Credit to stopping a billion-dollar tax giveaway.
Established the state Earned Income Tax Credit (EITC)
Delivering $20 million in annual tax relief to working families.
Joined the State Priorities Partnership
Leveraging new resources to become the go-to policy think tank for tax and budget policy in the State of Hawaiʻi.
Expanded the EITC to $40 million annually
Better targeting the families who need help most.
Leading the work to establish a State Child Tax Credit
A targeted investment that helps low-income families cope with Hawaiʻi's high cost of raising a family. The failure of low-wage jobs to provide economic stability perpetuates intergenerational poverty — and a Child Tax Credit is a proven intervention that helps children ladder up to economic success.
Reversed a harmful 2024 state tax policy
If fully phased in, Act 46 (2024) would have hollowed out the state budget — costing $1.4 billion per year in foregone revenue to give tax breaks primarily to upper-income households. The new tax policy preserves tax cuts for low- and middle-income households, stops future tax cuts for high-income households, and creates a new 13% income tax rate on very wealthy households. These changes increase the overall equity of the state's tax code while preserving $367–$650 million in revenue for the state to invest in our communities.
Research & News
Reports from our Taxes & Budget team, plus news coverage and analysis from around Hawaiʻi.
Build a fairer Hawaiʻi with us.
Sign up for email alerts on bills moving at the Capitol, read our SB 3125 FAQ or the Budget Primer, or reach out to your legislator — every voice helps shape a more equitable tax code.
Our work is connected.
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Food Equity
Healthy, culturally rooted food for every Hawaiʻi family.
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Affordable Housing
Homes Hawaiʻi’s families can actually afford.
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Transportation Equity
Safer streets, smarter transit, lower costs.
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Wages & Labor
Pay and protections that match the cost of living here.
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