Middle Class and Poor in the Aloha State Among the Most Overtaxed
By Keli’i Akina, Ph. D., Grassroot Institute of Hawaii
HONOLULU, Hawaii—Sept. 15, 2014—A study of the tax systems of all 50 states by the financial site Wallet Hub has found that Hawaii has the second most unfair tax system in the country, trailing only Washington in the gap between what citizens consider a fair tax structure and the reality of the state system. In addition, the Aloha State ranked third among states where the middle class (defined as the 40-60% income quintile) is overtaxed and was little better about overtaxing the poor. Hawaii ranked fourth in states that overtax the lowest 20% of income earners.
The survey found that the majority of Americans, regardless of political outlook, believe that higher income households should be taxed at a higher rate than lower earners. Those states that most conform to this model were rated more fair, while those where the tax burden was heavier on middle and lower income householders were rated as “unfair.” The Wallet Hub survey also noted that Hawaii is especially dependent on sales and excise taxes–the state ranked seventh in its reliance on revenues from this source. “This survey is only confirming what too many of us realize every day,” stated Keli’i Akina, Ph.D., President of the Grassroot Institute of Hawaii. “Hawaii’s tax system is badly in need of reform that stimulates the economy and reduces the burden on middle class and working households. This isn’t a question of partisanship or politics–the system is faulty no matter what your perspective. If Hawaii’s policy makers want to help our working families in a substantial and effective way, they should seek out reforms that provide real, measurable tax relief.”