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Action Alerts and Legislative Updates
HI Tax Fairness bills have seen tremendous support during the legislative session, with hundreds of pages of supportive testimony submitted. HB 209–the Tax Fairness Coalition’s priority tax fairness bill–is now in conference committee, the final hurdle it needs to overcome in the legislature to become law.
HB 209 originally included a package of Renters’ and Food Credit updates, a Working Family Credit, and an adjustment of high-earner tax rates to cover the credit costs so the bill is revenue neutral and to help begin to even out tax burdens across the income spectrum. The legislature has improved the initial bill by amending it to eliminate income taxes on Hawaii’s lowest earners. To offset the costs of eliminating these taxes, the Renters’ Credit update that was originally part of the bill has been removed.
The bill in its current form is an excellent approach to increasing tax fairness. Eliminating income tax on the lowest earning households just makes sense–why place an income tax on people who are struggling with poverty? And the bill also retains the Working Family Credit and Food Credit–refundable credits that are necessary to offset the General Excise Tax (GET). Every time someone pays for groceries or their rent, they get taxed through the GET. Even eliminating income taxes entirely on a low-income family won’t return to them a portion of the money they paid on GET–only refundable credits like the Working Family and Food credits can accomplish that. Coupling the elimination of income tax for low-earners with refundable credits is an ideal solution.
The ultimate outcome for HB 209 will be decided in conference committee by the end of April. There are no further opportunities to submit testimony, but if you have not signed up for our mailing list, please do so to learn about any developments and to get notified in case any opportunities arise to voice your support.