Let Families Keep More of What They Earn

Hawaiʻi has the lowest wages in the nation after adjusting for our cost of living, which is the highest in the nation. We also place the 2nd highest tax burden in the country on our low-income households. Our lowest-income households pay over 13% of their income in taxes, while those at the top pay 8% or less. Faced with this one-two-three punch, almost half (48%) of our state’s residents are living paycheck-to-paycheck.

To help our struggling neighbors, we need to come together and restore tax fairness in our state. We can do that by improving the already-existing Food Credit and Renters’ Credit and creating a Working Family Credit, all of which are targeted at low-income and working-class households. This can be paid for by reinstating the tax rates that were in place for our highest-income earners from 2009 to 2015.

Four-Part Plan to Restore Tax Fairness

(HB209 and SB648)

Working Family Credit

Help working families make ends meet by letting them keep more of what they earn

Renters’ Credit

Address high housing costs by adjusting the existing renters credit for 30+ years of inflation

Food Credit

Restore money taken from low-income people’s pockets by the GET by preventing the reduction of this credit

Restoring Revenue

Reinstate tax rates on Hawaii’s highest earners, which were discontinued in 2015 to help restore balance to our tax system

News

If wealthy can get tax breaks, why not low-income earners? Star-Advertiser, February 9, 2017
Like most people, we believe in fairness. And there is nothing fair about the fact that, as a percentage of their income, most of the people in at the upper end of the income ladder pay a smaller percentage of their income in Hawaii taxes than those who live near the bottom.

Tax Credit UrgedHawaii Tribune Herald, February 7, 2017
It is time to support tax fairness and ensure the tax burdens of our state are shared more equitably. There are two bills, SB648/HB209, submitted in the 2017 legislative session that address tax equity.

Working Family Tax Credit Rewards Hard Work for Low Pay Star Advertiser, February 2, 2017
“Most of us take a roof overhead and paid utility bills for granted. For the working poor, these basics are some of the “economic realities that strangle,” to borrow the words of Dr. Martin Luther King Jr.”

Restore Tax Credits For Low-Income Renters Honolulu Civil Beat, December 23 2016
Some of the conditions that make it difficult for families to get by, such as our high food and housing costs, are difficult to control. But our imbalanced tax structure, which taxes people into poverty, is among the conditions we can control.

Living Paycheck to Paycheck? Half of Hawaii Does Too. Hawaii Public Radio, March 30 2016
A poll conducted by QMark research has found that nearly half of Hawaii’s families are struggling financially, in part due to Hawaii’s high taxes on low-income earners. “Hawai‘i is one of the worst states in the nation in terms of taxing people in poverty. We have a tax system where our lowest income earners are paying taxes at nearly twice the rate of our most well to do citizens.”

Hawaii second-worst state in taxing the poor, study says Pacific Business News, January 14 2015
Hawaii is the second-worst state in terms of taxing its lowest-income residents, according to a new study by the Institute on Taxation and Economic Policy. The study, titled “Who Pays: A Distributional Analysis of the Tax Systems in All Fifty States,” found that Hawaii households with income in the lowest 20 percent pay 13.4 percent of their income in taxes, while those in the top 1 percent pay 7 percent of their income in taxes.

While this show started out discussing the minimum wage, the conversation turned to #HITaxFairness and the low-income and working-class tax credit bills that are still alive at the Capitol:Our senior policy analyst Nicole Woo appeared on PBS Hawai‘i last night to discuss Hawaiʻi's minimum wage. Watch the video here: www.youtube.com/watch?v=FVsEMw5h7rQ ... See MoreSee Less

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Resources

Struggling to Make Ends Meet: The Need for a Working Family Credit

This report summarizes findings from the Hawai‘i Appleseed Center for Law & Economic Justice and QMark Research poll conducted in 2016 that revealed nearly half of Hawai‘i families are living paycheck to paycheck.  Tax credits that let low and moderate income working families keep more of what they earn would provide a measure of relief to many struggling families, a concept which six out of seven survey respondents (86%) supported.

Characteristics of EITC-eligible Households

This flyer summarizes the characteristics of families that would receive the Working Family Credit based on information about which families receive the federal EITC.

Tax Fairness Brief

Hawaii Tax Fairness’s 2017 brief outlines a four-part plan to help families keep more of what they earn and restore tax fairness in Hawaiʻi.