Looking only at state and local taxes, not federal taxes, a WalletHub study of the 50 states puts Hawai‘i at the top of its ranking for overall tax burden, with 13.3% of our total personal income getting hoovered up by the state and county governments.
Alaska was lowest at 4.92%.
The biggest portion of our tax burden, at 7.48% of total personal income, is our compounding GET, giving us the nation's highest sales and excise tax burden. ASD explained how we got stuck with the GET last November.
Second largest burden is individual state income taxes, at 3.2% of total personal income. It's the nation's 7th highest income tax burden and lawmakers are fighting tooth and nail to hold onto every penny. Senate Bill 3125 continues to advance through the digestive tract of the Legislature, seeking to repeal the historic income tax cuts passed in 2024. Click the link above to see who has been voting for and against this.
We've published some informed opinions on how lawmakers could tighten government's own belt rather than pick our pockets. But ... it looks like they really, seriously just prefer to pick our pockets.
The smallest portion of our overall tax burden is property taxes at 2.62% of total personal income.
People believe a lot of odd things about our relatively low property taxes. I recently heard a fellow come before my McCully-Mō‘ili‘ili Neighborhood Board to elicit its support for a resolution that would call for a punitive property tax on vacant lots. He argued that property taxes are "artificially low," and therefore we could impose an additional tax — a fine, really, in spirit — on property owners who weren't doing anything with their lots but leaving them sitting empty, undeveloped, leading to blight.
I've heard people opine that our property taxes are low as a give-away to real estate investors, or to evil developers.
None of this is true.
Our property taxes are not artificially low. They're relatively low because, uniquely in the nation, Hawai‘i does not pay for public schools through property taxes. It pays for them through state taxes, so that cost — the DOE has an annual operating budget of $2.18 billion — appears on our income and GET bill.
This, by the way, has not stopped the government education set from wanting a dedicated property tax all to itself on top of what it already gets from the state general fund. People responsible for creating the nation's highest excise and sales tax burden forget that they've done so, then look at our property tax burden and think, "Hey! You people can afford to pay more!"
The WalletHub report shows us something else interesting about property taxes, which that plenty of states have a burden comparable to Hawai‘i and yet somehow still manage to pay for their schools with that money on top of whatever city services those taxes fund. Kentucky has a property tax burden of 1.95%, versus our 2.62%. Minnesota's property tax burden is 2.47%, lower than ours.
Well, with that, Happy Tax Day, Hawai‘i! You gave your all, more than any other Americans.
A. Kam Napier is editor in chief of Aloha State Daily. His opinions in Pipikaula Corner are his own and not reflective of the ASD team.
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A. Kam Napier can be reached at kam@alohastatedaily.com.
