West Maui Taxpayers Association
  • HOME
  • Olowalu Fire Station
  • WMTAPAC22
  • Affordable Housing
  • West Maui Lifesavers
  • Wall of Honor
  • Support WMTA
    • Membership - One Time Payment
    • Membership - Recurring Payment
    • Donations
    • Wills & Trusts
    • Charity Walk
  • Newsletter
  • Emergency Planning
  • News Blog
  • About Us
    • Goals & Objectives
    • Accomplishments
    • Board of Directors
    • WMTA vs WMIF
  • Contact
  • Subscribe

More Taxes on the Rich - But Guess What, You're Rich                              By Tom Yamachika, President

1/25/2021

0 Comments

 
WMTA Shares these commentaries, without taking a position unless otherwise noted, to bring information to our readers ​to view the archives of the Tax Foundation of Hawaii's commentary click here.
Picture
More Taxes on the Rich - But Guess What, You're Rich
By Tom Yamachika, President

On January 12, Governor Ige’s Chief of Staff and former Director of Taxation Linda Chu Takayama told the House Finance Committee a little more about the revenue enhancement measures (tax hikes) that the Administration is going to propose.

Ms. Takayama mentioned “wealth tax.”  But we aren’t sure what that means.

In some states, “wealth tax” means a tax on net worth.  If you add up the values of your house, car, stocks and bonds, artwork, and so forth and subtract your debts, that’s the amount you pay tax on.

That type of wealth tax would be a nightmare to administer here.  Our Department of Taxation used to have people who could value real property, and that is because it administered a state real property tax.  But then we had a Constitutional Convention in 1978 followed by a general election which voted to transfer the power and authority to tax real property exclusively to the counties.  And we never had a tax on personal property (such as the stocks and bonds, art, cars, and so on).  Acquiring the expertise to administer a tax like that would be no easy feat here.  The real rub, however, would be on the taxpayer side.  It’s already a problem getting people to value real property when you need it, such as when you want to sell the property or borrow against it.  But getting the value determined each year, and not only for real property but also cars, boats, art, and furniture?  Auwe!

A more probable scenario is that the Administration is considering a hike in the personal income tax. 

Currently, our state imposes income tax at 8.25% on a single person’s taxable income between $48,000 and $150,000.  A 9% bracket then applies to taxable income up to $175,000.  A 10% bracket then applies to taxable income up to $200,000.  Tax is imposed at 11% after that.

The thresholds are higher, of course, for a married couple or for people that qualify as heads of household. 

Hawaii now has the second highest top marginal rate in the United States.  The top rate belongs to California.  For now.

One big difference, however, is that the California top rate doesn’t kick in until taxable income exceeds $1 million (the final 1% is called a “mental health services tax”).  Their 9.3% bracket applies to those with incomes between $58,635 and $299,508.  When California’s 10.3% bracket kicks in, we are already well into our 11% maximum rate bracket.

Meaning that when our Hawaii legislators say, “Tax the rich,” they are much more likely to be talking about you and me as “rich,” not just folks living in Kahala Avenue mansions.  And, realistically speaking, if our lawmakers are looking to taxpayers to plug a $1.4 billion per year budget hole, do we even have enough of the Kahala Avenue types to make a dent in the problem?  Suppose that the top 1% of our population (1.4 million and falling) pulls down taxable income of $1 million on average.  Tacking on two percentage points to their top rate would yield 14,000 taxpayers times $20,000 in additional tax, or $280 million.  That’s a lot of money but not close to $1.4 billion.

This year, all details must be revealed to the public on January 25th, the day of Governor Ige’s State of the State speech.  At that time, we will know for sure what the Administration is proposing.  But there is much to worry about before then when the Administration and other lawmakers talk about an income tax increase.  In the most probable scenario, there is going to be good news and bad news.  The good news is that they are only going to tax the rich.  The bad news is that you’re rich.
0 Comments

Your comment will be posted after it is approved.


Leave a Reply.

    Picture

    RSS Feed


    If you wish to further discuss blog posts, please contat our office directly or contact us via Contact page.

    Categories

    All
    Affordable Housing & Homelessness
    Board
    Capital Improvements
    Charity Walk
    Commentaries
    Community Events
    Community Resources
    CON
    COVID 19
    Educational
    Emergency Planning
    Health & Safety
    HHARP
    Housing
    Infrastructure In West Maui
    In The News
    Kapalua Airport Runway Lights
    Kapalua Coastal Trail
    Lahaina Bypass
    Legislature Newsletters
    LLC
    Long Range Transportation Plan 2040
    Long-Range Transportation Plan 2040
    Makila
    MAUI CANCER CENTER
    Maui Cancer Center Llc
    Maui County
    Maui County Budget
    Maui County Dept Of Environmental Management
    Maui County - Dept Of Water
    Maui Destination Management Plan
    Press
    Public Safety In West Maui
    Real Property Tax
    Recycling Info
    TAT
    Tax
    Tourism
    Traffic & Roadways
    Transportation
    Video
    Vote
    Voting
    West Maui Community Plan
    West Maui Hospital
    West Maui Skate Park
    WMTA Annual Meeting
    WMTA Breakfast Events
    WMTA Candidates Night
    WMTA Disaster Preparedness
    WMTA Fundraisers
    WMTA Hot Topics
    Wmta Hot Topics Replay
    WMTA Membership
    WMTA PAC
    WMTA Sunset Sail
    WMTA Whale Watch

Quick Links: 

Home

News

About Us

Wall of Honor

Newsletter

Support WMTA
Emergency Planning

Contact

Copyright © 2021
Photo used under Creative Commons from wolfsavard
  • HOME
  • Olowalu Fire Station
  • WMTAPAC22
  • Affordable Housing
  • West Maui Lifesavers
  • Wall of Honor
  • Support WMTA
    • Membership - One Time Payment
    • Membership - Recurring Payment
    • Donations
    • Wills & Trusts
    • Charity Walk
  • Newsletter
  • Emergency Planning
  • News Blog
  • About Us
    • Goals & Objectives
    • Accomplishments
    • Board of Directors
    • WMTA vs WMIF
  • Contact
  • Subscribe