Tuesday, February 27, 2024
Hawai'i Free Press

Current Articles | Archives

Sunday, September 15, 2019
Thirty Years of State Tax, Part 2
By Tom Yamachika @ 5:00 AM :: 2071 Views

Thirty Years of State Tax, Part 2

by Tom Yamachika, President, Tax Foundation Hawaii

Q:  We continue our series on the past 30 years of state tax with our researcher, the Hawaii State Tax Watch Doggie’s wife.

Watch Doggie: And me!

A:  Oh! So you finally finished barking at the garbage truck?

Q:  We’ve been talking about the taxes that have ballooned over the years.

Doggie: And next on our list is conveyance tax. This needs to be paid whenever real estate is bought or sold.

A: It also applies to some real estate transactions other than sales. For example, when real estate is leased. In that situation the taxable amount is the present value of the rent payments.

Doggie: When the tax was originally enacted in 1966, the tax rate was 5 cents per $100 of price paid.

A: That was the rate 30 years ago. The tax didn’t raise much revenue. It was designed to require buyers and sellers to report the amount paid in real estate transactions because it wasn’t in the recorded deeds. That information was needed to properly administer the real property tax, which the State handled before the 1978 Constitutional Convention decided to transfer the real property tax to the counties.

Doggie: Over the years, the tax rate was hiked again and again. Now, the top rate is $1.25 per $100 of price paid for a condo or single-family residence that doesn’t qualify for a county homeowner’s exemption, and $1.00 per $100 for other property.

A: And there are two earmarks on the tax, 10% for the land conservation fund and 50% for the rental housing revolving fund. According to the Department of Taxation’s annual reports, the tax brought in about $3.5 million in fiscal year 1995 and a whopping $100.6 million in fiscal 2018.

Doggie: How’s that for explosive growth?

Q: So what happened to our individual income tax, which is near and dear to our hearts?

A: In 1989, our top individual tax rate was 10%. The standard deduction for a married couple filing jointly was $1,900, and personal exemptions were $1,040 per person. A family of four at median household income ($38,829 in 1989, according to DBEDT’s 2018 Data Book) would have $32,769 of taxable income and would need to pay $2,393. They would be in the second bracket from the top where any extra dollar made would be taxed at 9.5%.

In 2018, the most recent filing year, our top individual tax rate is 11%. The standard deduction for a married couple filing jointly is $4,400, and personal exemptions are $1,144 per person. A family of four at the 2017 median household income ($91,460) would have $82,484 of taxable income and would need to pay $5,359. They would be in the fifth bracket from the top where any extra dollar made would be taxed at 7.9%.

Doggie: That doesn’t look like explosive growth.

A: I think that’s because people watch the income tax carefully, while they might not understand or appreciate the specialty taxes.

Q: Our mission at the Foundation for the past 60 years has been to promote and encourage efficiency and economy in Hawaii government at both the state and county level and to make sure people have enough information to watch all the taxes carefully.

Doggie: If people don’t, bad things might happen, as we found out with the TAT, the barrel tax, and the conveyance tax. Keep your eyes peeled and bark if something looks funny! We will!

Related: Thirty Years of State Tax, Part 1


TEXT "follow HawaiiFreePress" to 40404

Register to Vote


808 Silent Majority

Aloha Pregnancy Care Center


Antonio Gramsci Reading List

A Place for Women in Waipio

Ballotpedia Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii


Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute


Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii ConCon Info

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together



Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Moms for Liberty

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

July 4 in Hawaii

Kakaako Cares

Keep Hawaii's Heroes

Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui


Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii


National Christian Foundation Hawaii

National Parents Org Hawaii

NFIB Hawaii News

No GMO Means No Aloha

Not Dead Yet, Hawaii

NRA-ILA Hawaii

Oahu Alternative Transport


OHA Lies

Opt Out Today


Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Practical Policy Institute of Hawaii

Pritchett Cartoons

Pro-GMO Hawaii



Rental by Owner Awareness Assn

ReRoute the Rail

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

School Choice in Hawaii


Sink the Jones Act

Statehood for Guam

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

UCC Truths

US Tax Foundation Hawaii Info

VAREP Honolulu


West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii