Study: Hawaii’s lowest-income earners pay some of the highest tax rates in the nation

The study says the poorest pay significantly more of their income in taxes compared to the richest.
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Updated: Oct. 18, 2018 at 6:37 AM HST
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HONOLULU (HawaiiNewsNow) - Hawaii’s lowest-income wage earners face some of the highest state and local tax rates in the nation, according to a new study by the Institute on Taxation and Economic Policy.

The study, which intends to assess tax fairness across the nation, says Hawaii’s lowest-income residents pay 68 percent more in taxes as a portion of their income, compared to the state’s wealthiest residents.

The study found that the poorest pay 15 percent of their income in state and local taxes, while the richest pay only 8.9 percent, which would be the second-highest tax rate in the nation for people with similar incomes.

Only Washington State had a larger effective tax rate on the low-income population. The percentages did not factor in federal tax rates.

Low-income earners — the poorest 20 percent — in Hawaii are those who bring in an average of $10,200 per year. Those in the top 1 percent bring in $948,200.

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