Hawaii thinktank shows state tax burden is highest in the nation

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Updated: Mar. 25, 2021 at 6:05 PM HST
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HONOLULU, Hawaii (HawaiiNewsNow) - Hawaii residents paid more than double the national average in state taxes in 2020, a Hawaii public policy thinktank found.

Using data from the National Association of State Budget Officers and the U.S. Census Bureau, the Grassroot Institute of Hawaii found the per capita burden for Hawaii is $5,428 in 2020, which is compared to national averages of $2,664 in 2020.

Researchers said the data shows that Hawaii’s general excise tax was responsible for the largest share of the state tax burden. They said because the tax is regressive, those in the lowest economic brackets pay a large portion of their income to the state.

“Everyone talks about the high cost of living in Hawaii and how it forces so many of our friends and family to leave for the mainland. But here we see one of the biggest reasons for that high cost of living: Hawaii’s sky-high taxes,” said Kelii Akina, Grassroot Institute president and CEO.

“Especially now, in the midst of Hawaii’s worst economic crisis in decades, we need our legislators to understand that that these high taxes are hurting our state.”

In terms of county taxes, the institute found that Hawaii’s per-capita county tax burden ranked 25th in the nation as of 2018, which is the most recent year for which data is available.

Researchers said Hawaii’s county property tax rates are relatively low by national standards, but the state’s high property values ensure that Hawaii residents pay close to the national average.

In 2018, Hawaii’s total was $1,355, slightly below the national average of $1,674.

With state and county tax burdens combined, Hawaii ranked fifth highest at $7,319 per capita as of 2018.

The state ranked first was New York, with combined state and county taxes of $9,822.

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