Public testimony prompts lawmakers to rethink repealing income tax cuts

from Grassroot Institute, March 18, 2026

Two bills that would “pause” Hawaii’s historic 2024 income tax cuts over a five-year period have run into trouble with Hawaii residents who have been counting on keeping more of their own money in the coming years, estimated to total more than $7 billion over the life of the phased-in cuts.

The bills together generated more than 300 testimonies from both individuals and organizations opposing the bills, which if enacted would put an end to the remainder of the cuts that went into effect in 2024 and are scheduled to wrap up in 2031. 

The House House Committee on Finance held a hearing on HB2306 on March 3. The Senate Committee on Ways and Means considered SB3125 on March 5.

The governor and other proponents of the bill allege that the cuts are needed to cover unexpected expenses caused partly by a loss in some federal funding.

Despite the public backlash to the bills, both emerged from the hearings with different amendments.

On the House side, House Finance Committee Chair Rep. Chris Todd added amendments that would increase the tax rates on each of the top three tax brackets by 1 percentage point while keeping the planned changes to the standard deduction for everyone else in place.

For Hawaii taxpayers in those top three brackets, Todd’s amendments would be a tax increase.

Meanwhile, Senate Ways and Means Committee Chair Sen. Donovan Dela Cruz amended that bill to keep the planned tax reductions in place for joint filers making less than $350,000 and single filers making less than $175,000 but repeal it for all others. 

Dela Cruz also amended the bill to abolish business certain tax credits. 

Both pieces of legislation also propose extending certain tax credits for low- and middle- income families and making changes to the dependent-care tax credit.

Looking ahead, the next steps are for the Senate to consider the House version and for the House to consider the Senate version. 

If the bills survive those hearings, legislators will likely convene a conference committee to try to come to an agreement.