Here’s one headline that caught my eye while I was browsing!
Hawaii’s State and Local Tax Burden Below National Average
No, it didn’t show up on a progressive web site somewhere.
It’s from the Tax Foundation, the national organization rather than the Tax Foundation of Hawaii.
There’s more.
Hawaii’s 2009 state and local tax burden of 9.6% of income is below the national average of 9.8%. Hawaii’s tax burden has decreased overall from 10.0% (24th nationally) in 1977 to 9.6% (22nd nationally) in 2009. Taxpayers in the Aloha state pay $4,399 per capita in state and local taxes.
Hawaii’s State-Local Tax Burden, 1977-present
Other States’ State/Local Tax Burdens
Map of U.S. Showing all State’s Burdens and Ranks
Historical Chart Comparing All States’ State/Local Tax Burdens from 1977 to 2009
That’s very different from the “tax hell” perspective we’re used to hearing.
It got me wondering about the Tax Foundation of Hawaii, which is a 501(c)(3) charitable or educational organization.
Interestingly, the group does not have a registered lobbyist, according to the list maintained online by the State Ethics Commission.
IRS describes lobbying as “attempting to influence legislation (commonly known as lobbying).”
An organization will be regarded as attempting to influence legislation if it contacts, or urges the public to contact, members or employees of a legislative body for the purpose of proposing, supporting, or opposing legislation, or if the organization advocates the adoption or rejection of legislation.
And in its latest 2009 federal tax return, the foundation answered “No” in response to a question about whether it does any lobbying.
One could get a very different impression looking at the number of times the foundation has testified during the legislative session.
A text search of legislative documents turned up a long list of committee reports citing testimony by the Tax Foundation of Hawaii (you have to skip past the bills to the committee reports).
I’m sure there’s some parsing of the rules that can be used to defend this as not really lobbying, but you could sure fool me.
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Your article does not take into account the tax and fee increases that were adopted by the legislature in the 2009 and 2010 sessions. They certainly increased the tax on ordinary income for those earning higher wages.
These are apparently the latest tax figures available. Remember that virtually every state has resorted to tax and fee increases to deal with the current fiscal crisis. Hawaii is just one of the crowd on this.
That may be true, but your article does not make that clarification so that apples can be compared to apples.
Thanks for posting this, Ian.
Taxes can be confusing and there is a minor industry in Hawaii of conservative activists who specialize in claiming our rates are abnormally high, that we are living in a special “tax hell.”
Lowell Kalapa is the local representative of the national organization, yet he has made no effort to publicize the national organization’s findings, as they directly conflict with his role as a core member of the local “tax hell” chorus.
Earlier in the session, he was claiming a proposed hike in the alcohol tax would cause some bar owners to “raise the price of their drinks two or three dollars.” I guess he expected people to defer to his superior knowledge and not check his math. The actual tax would add less than a nickel to the cost of a drink. If some bar owner would use the nickel tax increase to jack up his prices, I expect the market would respond as the customers moved on to a more honest establishment. Folks trying to understand Hawaii’s taxes should employ the same attitude when dealing with so-called “tax experts.”
Tax Foundation of Hawaii “testimony” is, in my recollection of 10 years of their submissions at the Lege, nearly always offered in terms of “comments.” It was (is?) very rare for them to explicitly offer support or opposition to any particular piece of legislation. Instead, the usual M.O. seemed to be for TFoH to concatenate condescending remarks that would either essentially dismiss the proposal altogether or imply that the proposal did not go anywhere near far enough. The end result is that they come across as if they see themselves as too damn smart/cool to be participating. Few or zero constructive criticisms or suggested amendments.
Tru ‘dat.
That was all I was going say but no can make a comment that short, or says da box that came up when I try.
You can lobby without registering, filling out those forms, and following all those icky rules that apply to commoners – and get away with it.
…and no mention of Lowell Kalapa? TFoH and he are hard to separate.
Well, I was trying to avoid personal references.
Here’s another twist on taxes: Hawaii gets $1.44 of Federal spending for every $1 in Federal tax paid: http://www.ritholtz.com/blog/2011/04/united-states-federal-tax-dollars/
@Zack, while it’s true that these figures do not include the very latest tax increases, it’s also equally true neither does it include tax increases other states enacted in the same time period.
Indeed, any national reporting of almost anything–GSP, taxes, income, home ownership, public assistance, graduation rates, etc., etc.–is not done in real time but there is always a lag.
So you either accept this or assert that all statistics are flawed and therefore useless.
If one goes to the detailed methodology, one finds that Hawaii in 2008 (latest data presented) has Hawaii ranked as the 5th highest tax burden.
The difference being some complex adjustments made among rankings for states with high export of tax (like Hawaii) , states with natural resource extraction fees, states with high capital taxes because of income, etc. I don’t know if our relatively high military population is factored in but that could be of interest too.
The adjusted rank is shown in the Methodology Working Paper linked at the Tax Foundation website. Worth reading.
Once again I assert, however, our problems are NOT because we are under-taxed.
All of which means both the whining and the problems can continue?
Richard,
You want to claim we are “over-taxed” based upon what? You have read through the Tax Foundation’s methodology paper, so you understand how flawed other rankings are.
We both see frequent posts and letters to the editor claiming Hawaii’s taxes “are the highest in the nation.” Yet that is clearly false in any meaningful way. Even the claim that we are number 5 is misleading, as the Tax Foundation study shows. (The study showing Hawaii has the 5th highest tax burden also shows Alaska has the #1 tax burden by a wide margin. Yet which local conservatives make that claim?)
These “tax hell” claims continue to distort a frank discussion of the problems we face and the options available to us.
If it were more broadly understood that our actual tax burden is only the 22nd highest in the country, it would drain the discussion of a great deal of the panicked rage coming from conservative quarters and allow for calmer dialogue.
Can we agree that is desirable?
Hawaii’s food and real estate prices and cost of living should be equated in this mix somehow.
There are two types of people that roam the halls of the State Capitol: lobbyists and lunatics. If Mr. Kalapa isn’t a lobbyist, well…
The national tax foundation conclusion is based on misguided idea of “tax burden.”
Tax burden is of highest impact on producers in the economy.
In Hawaii, that means the small business operators.
Their income gets whacked not simply by income tax but by the brutal GET.
The GET whacks us small businesses directly and at its most insidious way indirectly by pass throughs.
For example, here we are, barely one fourth of the way into the year, and already our CAM got increased to adjust for increases in electricity costs and the GET on the increases in electricity costs.
Count that GET too, national Tax Foundation, when you tally our tax burden.
Otherwise, your’s is garbage in, garbage out.
Did you bother to read the Tax Foundation’s study before claiming it ignores the GET and insinuate it is “garbage”?
It is clear you are feeling stressed by economic pressures. And you resent having to pay taxes on top of your other expenses, particularly in these hard times. But teachers, cops and social workers also have bills to pay, children to feed. And unfounded, ill-informed claims about how high our taxes are– even in the face of evidence to the contrary– are NOT a good basis for demanding your personal hardship be transferred to their families.
State and federal revenues have declined more sharply than the overall economy as a whole. And some segments of the population have been hit harder by the recession than others.
If taxes are to be raised– and I think they must be– how do we do it in a manner which is both equitable and efficient?
Wow! an amazing difference between this and Randy Roth’s analysis:
http://www.youtube.com/user/HawaiiReporter#p/a/u/0/lFdonj576nU
I don’t think any set of numbers on taxes tells the whole story. And there is always another set of numbers. But this is reasonable data, objectively presented, with no agenda behind it that I’m aware of. What do we know about our taxes in short? 1) We don’t like them. 2) Real property taxes are relatively low. 3) A good portion of our state taxes are paid by non-residents. 4) We still don’t like them.