Friday, June 05, 2020
Hawai'i Free Press

Current Articles | Archives

Sunday, April 08, 2012
Hawaii Among Worst States in Nation on Taxing the Working Poor
By Selected News Articles @ 2:16 PM :: 4524 Views :: Energy, Environment

Hawaii Among Worst States in Nation on Taxing the Working Poor

from Center on Budget and Policy Priorities

Unlike most states, Hawaii taxes working-poor families deeper into poverty, and it charges them higher tax bills than all but four other states, according to a new report from the Center on Budget and Policy Priorities.

"Hawaii should help working families work toward the middle class rather than undermine their efforts with steep tax bills," said Phil Oliff, policy analyst at the Center and co-author of the report. "When people strive to better themselves and the lives of their families, not only do they benefit, but the state's economy grows stronger and all Hawaii residents are better off."

Hawaii charges families of four with incomes at the poverty line $331 in income taxes, higher than all but two other states. Hawaii is one of only 15 states to tax such families at all. The federal poverty line is $23,018 for such families.

Hawaii is one of only 10 states that taxes families of three who are living at or below the national poverty line. Its tax at the poverty line is $258. The poverty line is $17,922 per year for such families.

Exempting Poor from Income Tax Helps Families, Makes Economic Sense

In addition to undermining the efforts of hard-working people to climb into the middle class, taxing the working poor also hinders a state's long-term efforts to create a highly-skilled workforce and vibrant economy. That's because reducing the income of poor families reduces children's chances of academic success and their future earning potential.

Since the early 1990s the number of states levying income taxes on working poor families has fallen by well over a third, thanks to a successful, bipartisan effort in many states among policymakers who recognized that such taxation is counterproductive. As a result, most states with income taxes no longer tax the poor. Hawaii remains an outlier.

"Policymakers across the political spectrum agree that taxing a working-poor family deeper into poverty is counter-productive," said Oliff. "The federal government has exempted such families for decades and a majority of states now do so as well. Hawaii should follow suit."

State EITC Can Boost Hawaii's Working Families and the Economy

An option that Hawaii policymakers have considered in past years is a state earned income tax credit (EITC). Other states use EITCs to reduce the tax obligation of working-poor families, mostly those with children. State EITCs have enjoyed decades of bipartisan support because they also encourage work and reduce poverty.

If Hawaii were to exempt its low-income families from the state income tax through an EITC or another mechanism, those families would continue to pay a number of other federal and state taxes, including federal payroll taxes and state excise and gasoline taxes. When all state and local taxes are taken into account, the poorest fifth of households in Hawaii paid more than 12 percent of their incomes in taxes, on average, in 2007.

Bipartisan Efforts to Reduce Taxation of the Poor Have Stalled

The report, released annually by the Center, examined income taxation of the poor in the 42 states that levy income taxes. This year, it found that successful bipartisan effort over the last two decades to reduce state income taxes on working-poor families has stalled.

No new states exempted working-poor families of four from income taxes in 2011, and in almost all of the 15 states where such families still pay income taxes, including Hawaii, they saw their income taxes increase.

The full report, The Impact of State Income Taxes on Low-Income Families in 2011, is available at

# # # #

The Center on Budget and Policy Priorities is a nonprofit, nonpartisan research organization and policy institute that conducts research and analysis on a range of government policies and programs. It is supported primarily by foundation grants.

CBPP: The Impact of State Income Taxes on Low-Income Families in 2011

Borreca: Legislators Rejected Lingle’s Call to Stop Taxing the Poor


TEXT "follow HawaiiFreePress" to 40404

Register to Vote


808 Silent Majority

808 State Update AM940


ACA Signups Hawaii



Alliance Defending Freedom

Aloha Life Advocates

Aloha Pregnancy Care Center

American Council of Trustees and Alumni

American Mothers of Hawaii



Antonio Gramsci Reading List

A Place for Women in Waipio

Astronomy Hawaii

Audit The Rail

Ballotpedia Hawaii

Better Hawaii 

Blaisdell Memorial Project

Broken Trust 

Build More Hawaiian Homes Working Group

CAFR Hawaii

Castaway Conservative

Children's Alliance Hawaii

Children's Rights Institute

Christian Homeschoolers of Hawaii

Citizens for Recall

Cliff Slater's Second Opinion

Coffee Break

CSIS Pacific Forum

DAR Hawaii

DVids Hawaii

E Hana Kakou Kelii Akina

E Māua Ola i Moku o Keawe

Farmers For Choice Hawaii


Fix Oahu!

Follow the Money Hawaii

Frank in Hawaii

Front Page Magazine

Frontline: The Fixers

Genetic Literacy Project

Get Off Your Butts!

God, Freedom, America

Grassroot Institute

Hawaii Aganst Assisted Suicide

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii Coalition Against Legalized Gambling

Hawaii ConCon Info

Hawaii Credit Union Watch

Hawaii Crime Victims' Rights

Hawaii Crop Improvement Association

Hawaii Debt Clock

Hawaii Defending Marriage

Hawaii Defense Foundation

Hawaii Families for Educational Choice

Hawaii Family Advocates

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii Firearm Community

Hawaii Fishermen's Alliance

Hawaii Future Project

Hawaii Gathering of Eagles

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii March for Life

Hawaii Meth Project

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Right to Life -- Big Island

Hawaii Right to Life -- Oahu

Hawaii Shield Law Coalition

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

Heritage Foundation

HI Coalition Against Legalized Gambling



Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Homeless Crisis

Honolulu Navy League

Honolulu Traffic

Horns of Jericho Blog

House Minority Blog

House Republican Caucus YouTube


Hump Day Report

I Vote Hawaii

If Hawaii News

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

Iowa Meets Maui

Jackson v Abercrombie

Jihad Watch

July 4 in Hawaii

Kahle v New Hope

Kakaako Cares

Kau TEA Party

Kauai Co GOP

Keep Hawaii's Heroes


Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Malulani Foundation

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

Mauna Kea Recreational Users Group

Middle East Forum--The Legal Project

Mililani Conservatives for Change

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

Muslim Brotherhood in America

NAMI Hawaii


National Christian Foundation Hawaii

National Parents Org Hawaii

National Wind Watch

New Zeal

NFIB Hawaii News

No GMO Means No Aloha

Northwest Economic Policy Seminar

Not Dead Yet, Hawaii

Now What I Really Think

NRA-ILA Hawaii

Oahu Alternative Transport

ObamaCare Abortion Hawaii


OHA Lies

Opt Out Today

Pacific Aviation Museum

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Pritchett Cartoons 

Pro-GMO Hawaii


Rental by Owner Awareness Assn

Republican Party -- Hawaii State

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

Save Dillingham Airfield

School Choice in Hawaii

SIFE Remington

SIFE W. Oahu 

Sink the Jones Act

Smart About Marijuana--Hawaii

St Marianne Cope

State Budget Solutions Hawaii

State Policy Network

Statehood for Guam

Tax Foundation of Hawaii

The Harriet Tubman Agenda

The Long War Journal

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

Truth About Trade & Technology - Hawaii

UCC Truths

Union Members Know Your Rights

US Tax Foundation Hawaii Info

Valor in the Pacific

VAREP Honolulu

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii