HomeMy WebLinkAboutCOM 0751.137 2014-2016LOW -income nawall Ke5lOenlb
Have Nearly Twice the Tax Rate
as the Rich
Hawaii is the second -worst state for taxing poor people, a new
report finds.
JANUARY 14, 2015 • By ANITA HOFSCHNEIDER 'VV _,62F,4
Hawaii taxes low-income people at nearly twice the rate as the richest people in the
state, according to a new analysis by the Institute on Taxation and Economic Policy
and the Hawaii Appleseed Center for Law and Economic Justice.
That makes Hawaii the second -worst state for taxing the poor, the analysis
concluded.
The report found that the top 1 percent of households in Hawaii pay just 7 percent
of their income in taxes when you consider the various taxes in the state. In
contrast, the poorest people pay 13.4 percent of their income in taxes.
The state's reliance on general excise tax (GET) revenue rather than income tax.
revenue puts more of the tax burden on lower income people.
] Hawaii
State & Local Taxes?in 015
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"In recent years, multiple studies have revealed the growing chasm between the
wealthy and everyone else," said Matt Gardner, executive director of the Institute
�I.
on Taxation and Economic Policy, in a press release. "Upside down state tax
systems didn't cause the growing income divide, but they certainly exacerbate the
problem. State policymakers shouldn't wring their hands or ignore the problem.
They should thoroughly explore and enact tax reform policies that will make their
tax systems fairer." c
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State & Local Taxes in 2007
Shares of family income for non -elderly taxpayers
13%
12%
11%
10%
90/0
8%
7%
6%
5%
4%
3%
2%
1%
_1%
-2%
Lowest 20% Second 20% Middle 20% Fourth 20% Next 15% Next 4% TOP 1%
I! Sales & Excise S, Property Income 0 Federal Offset Total (inc. Federal Offset)
Income
Lowest
Second
Middle
Fourth
Top 20%
Next 15%
Next 4%
TOP 1%
Group
20%
20%
20%
20%
Income
Less than
$18,000-
$33,000-
$51,000-
$85,000-
$176,000-
$400,000
Range
$18,000
$33,000
$51,000
$85,000
$176,000
$400,000
or more
Average Income in Group
$9,800
$24,700
$41,400
$65,900
$117,800
$251,100
$1,040,300
Sales & Excise Taxes
10.0%
7.7%
5.9%
4.7%
3.3%
2.0%
1.1%
General Sales-Individuais
4.5%
3,5%
2.7%
2.1%
1.5%
0.9%
0.5%
Other Sales & Excise -Ind.
2.2%
1.5%
1.1%
0,8%
0.5%
0.3%
0.1%
Sales & Excise on Business
3.3%
2.7%
2A%
1.7%
1.3%
0.8%
0.5%
Property Taxes
2.2%
1.7%
1.8%
1.4%
1.3%
1.1%
1.1%
Property Taxes on Families
2.1%
1.6%
1.7%
1 A%
1.2%
0.90/0
0.4%
Other Property Taxes
0.0%
0.0%
0.1%
0.1%
0.1%
0.2%0
0.7%
Income Taxes
0.0%
2.6%
3.8%
3.9%
4.3%
4.6%
5.1%
Personal Income Tax
H%
H%
3.8%0
3.9%
4.3%
4.6%
5.0%
Corporate Income Tax
0.0%
0.0%
0A%
3
0.0%
0.0%
0.1%
TOTAL TAXES
12.2%
11.9%
11.4%
10.0%
8.9%
7.7%
7.3%
Federal Deduction Offset
-0.1%
-0,2%
-0.6%
-1.1%
-1.1%
-1,011'
TOTAL AFTER OFFSET
12.2%
11.8%
11.2%
9.4%
7.8%
6.6%
6.3%
Note: Table shows 2007 tax law updated to reflect permanent changes in law enacted through October 2009.
Who Pays? A Distributional Analysis of the Tax Systems in All 50 States Institute on Taxation & Economic Policy - November 2009