October 17, 2018

Big Island Now: STUDY: Hawai‘i’s Low-Income Taxpayers Carry 2nd Highest Tax Rate

ITEP Work in Action

The main cause of the heavy tax burden on those making the least in Hawaiʻi is the General Excise Tax (GET). Families in the lowest fifth spend 10.5% of their meager incomes on the GET, while the top 1% spend only 1.2% of their large earnings. In other words, those at the bottom spend 8.75 times more of their income on the GET than do those at the top.

As the Who Pays? study shows, broad-based graduated personal income taxes are the most equitable way to raise revenue. Given that low-income people are paying 68% more of their income in taxes than the richest in Hawaiʻi, lawmakers should carefully weigh the distribution of their taxes, as measured by Who Pays?, when considering changes to the tax code.

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