Invoice that simply handed the Hawaii Senate would create the best stage of revenue tax within the US

Hawaii could be on track to set the highest level of state income tax in the country.

The State of Hawaii Senate passed Senate Act 56 on March 9, which aims to address a billion dollar shortage in state revenue through a number of different tax and tax cuts.

The measure introduced by Senator Stanley Chang (District 9 – O’ahu) would impose a 16% tax on those earning more than $ 200,000 a year, up from the current rate of 11%.

It would also increase the capital gains rate from 7.25% to 11% and impose a flat corporate tax rate of 9.6%. The bill would also lift certain GET exemptions from July 1, 2021 through June 30, 2023.

Finally, SB 56 would increase transportation taxes on property sales from $ 1 million to $ 2 million to 0.6%. from $ 2 million to $ 4 million to 1%; and so on. The highest range that transportation taxes would increase is $ 10 million and above to 2%.

ARTICLE CONTINUED UNDER AD

Individual applicants earning less than $ 200,000 would not be subject to a state income tax increase.

ARTICLE CONTINUED UNDER AD

“With a budget deficit of over US $ 2 billion, we need to look for different ways to generate much-needed revenue for our state,” Senator Chang said in a statement. “To avoid future vacation days and layoffs for government employees, we must consider every option to avoid disruptions to essential government services.”

Governor David Ige had announced the state’s intention to take several workers off leave for two days per month for two days from 2021. However, he postponed that action until at least the summer, when a $ 900 billion coronavirus aid package was passed in December.

President Joe Biden signed a $ 1.9 trillion aid package Thursday that includes direct funding from state and county governments to help address budget constraints.

ARTICLE CONTINUED UNDER AD

Developments are making the prospect of vacation less necessary, especially as the Hawaii Safe Travels program is bringing more and more visitors back to the state as COVID-19 vaccination rates rise daily across the country.

Governor David Ige said earlier this week that a vaccination pass program could become a reality in Hawaii as early as May, adding that he expects a return to some sort of prepandemic normal by mid to late this summer.

Federal dollars and signs of an impending economic recovery could give lawmakers a break that would otherwise have pushed for income-generating tax hikes.

However, multiple sources in the state capital have told Big Island Now that the political context of levying taxes on wealthy individuals and companies and creating what many lawmakers have advocated “tax justice” is unlikely to prove more favorable than it is now. That reality will keep tax hikes going, even as more than $ 6 billion in federal aid will soon flow into Hawaii, along with more visitor dollars per month.

The measure was passed in third reading in the Senate on Wednesday and will be submitted to the House of Representatives for consideration.

Comments are closed.