National Report Sees Hawaii Drop to 42nd in Economic Competitiveness

Grassroot Institute says state tax burden continues to stifle economic growth in Hawaii

News Release from Grassroot Institute

HONOLULU, HAWAII--April 11, 2016--The release of the 2016 edition of Rich States, Poor States, the ALEC-Laffer State Economic Competitiveness Index, indicates that Hawaii has taken a step backwards. The state slipped five spots from its 2015 ranking, landing at 42nd nationally in economic competitiveness. The drop means that Hawaii now ranks in the bottom ten states overall for those economic policy variables that are most closely associated with state growth.

While many states (such as Tennessee and Florida) rose in the rankings based on tax cuts and market-oriented reforms, Hawaii's persistent taxation and labor issues contributed to its lower score and slide in overall rating. The state ranked 50th overall in sales tax burden, estate/inheritance tax, and its labor and union policies, and 43rd in top marginal personal income tax rate.

There were, however, some bright spots. Hawaii ranked 9th in property tax burden as well as in recently legislated tax changes, and the top marginal corporate tax rate still ranks in the top half of the country.

“While Hawaii should be commended for allowing its personal income tax rates to phase down as scheduled, the state’s ranking still moved in the wrong direction in the 2016 Rich States, Poor States: ALEC-Laffer State Economic Competitiveness Index," said Jonathan Williams, Vice President of ALEC's Center for State Fiscal Reform. "Hawaii’s economic outlook ranks 42nd in 2016, a decline of five spots from 2015. Excessive income taxes, lack of right-to-work status, and the highest sales tax burden in the nation, with the General Excise Tax, all combined to drive Hawaii’s economic outlook ranking into the bottom 10 nationally. Hawaii’s disappointing economic outlook ranking in Rich States, Poor States unfortunately means fewer economic opportunities for the hardworking people of Hawaii."

Keli'i Akina, Ph.D., President of the Grassroot Institute, stated, "There is no mystery about what our state needs to do to become more economically competitive. The formula is right in front of us--embrace policies that will lower taxes on our citizens, reform the regressive general excise tax, reduce red tape, and make Hawaii a more affordable place to live and do business. Until we get serious about these goals and force the legislature to take proactive steps towards real change, we will continue to see our economic rating fall."

To read the Rich States, Poor States report in full, go to: www.alec.org/rsps .

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About the Grassroot Institute of Hawaii:

Grassroot Institute of Hawaii is a nonprofit, nonpartisan research institute dedicated to the principles of individual liberty, the free market, and limited, accountable government throughout Hawai`i and the Asia-Pacific region.  Read more about us at http://www.grassrootinstitute.org/

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About Grassroot President:

Keli’i Akina, Ph.D.,  is a recognized scholar, educator, public policy spokesperson, and community leader in Hawaii.  Currently, he is President/CEO of Grassroot Institute of Hawaii, a public policy think tank dedicated to the principles of individual liberty, free markets and limited, accountable government.  An expert in East-West Philosophy and ethics, Dr. Akina has taught at universities in China and the United States and continues as an adjunct instructor at Hawaii Pacific University.  Dr. Akina was a candidate for Trustee at Large of the Office of Hawaiian Affairs in the 2014 General Election run-off.