Wednesday, March 27, 2024
Hawai'i Free Press

Current Articles | Archives

Friday, April 20, 2018
Hawaii Legislature wants to vacuum up your tax savings
By Keli'i Akina PhD @ 3:11 PM :: 3804 Views :: Taxes

Hawaii Legislature wants to vacuum up your tax savings

From Grassroot Institute, April 20, 2018

Many people got their first taste this week of the tax cuts passed by Congress at the end of 2017.

The merits of the Tax Cuts and Jobs Act were hotly debated in Congress along partisan lines, but it was clear that the intent of the cuts was to increase the nation’s GDP (gross domestic product), increase employment rates and put more money back in the wallets of individual taxpayers.

In the Aloha State, however, many in the state Legislature apparently would prefer that you turn over your federal tax savings to the state.

One of the provisions of the Tax Cuts and Jobs Act was to increase the threshold of the federal estate tax. For individuals the exemption was doubled to $11.2 million (from about $5.6 million), and for surviving spouses up to about $22.3 million (from $10.9 million).

The estate tax is already controversial, as some argue that it’s effectively double taxation — a tax at the time of death on property that has already been taxed. However, the lure of capturing revenue from the estates of people who recently died is just too great for many government officials to ignore.

So when Congress raised the exemption on the estate tax, many in the Hawaii Legislature saw an opportunity — not to similarly lower Hawaii’s estate taxes, but to scoop up the savings gained from the change in federal law.

They pulled a “gut and replace” maneuver with HB 207, which was originally about calculating tax credits for rent. Now it adds a new top rate of 20 percent for estates valued at $10 million or more, and for good measure, it increases the conveyance tax on condos and single-family residences valued at $2 million or more.

There’s no doubt that the federal tax cuts were the impetus for the proposed state tax hike. It’s right there in the bill’s introduction, which states:

“The Legislature further finds that these changes to the federal estate tax provide the state with an opportunity to benefit Hawaii residents. By amending Hawaii’s estate tax thresholds and rates, the state can capture some of the money that certain residents will no longer be required to pay to the federal government and redirect that money to the state.”

Never mind that people should be allowed to enjoy the fruits of their labor and property. Forget the potential benefits that a tax cut could offer to our local economy. The legislators promoting this bill view the federal cuts as an opportunity to collect more money for the state.

In the latest edition of “Rich States, Poor States,” Hawaii ranked 45th overall. One of the biggest reasons for that low ranking was Hawaii’s high level of taxation: 50th in “sales tax,” 48th in top marginal personal income tax rate, 48th in “remaining tax burden.”

There were, as usual, some bright spots, notably our comparatively low property tax burden and respectable corporate income tax rate. But if the “Rich States, Poor States” index provides a map to prosperity, the Legislature is taking a wrong turn.

The solution to improving the state economy won’t be found by vacuuming up any money left untouched by the federal tax cuts. It’s by making some cuts of our own.

E hana kakou (Let’s work together!),

Keli'i Akina, Ph.D.

President/CEO, Grassroot Institute

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

808 Silent Majority

Aloha Pregnancy Care Center

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Ballotpedia Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii

FIRE

Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Habele.org

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii ConCon Info

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

HIEC.Coop

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Moms for Liberty

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

July 4 in Hawaii

Kakaako Cares

Keep Hawaii's Heroes

Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

MentalIllnessPolicy.org

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

Natatorium.org

National Christian Foundation Hawaii

National Parents Org Hawaii

NFIB Hawaii News

No GMO Means No Aloha

Not Dead Yet, Hawaii

NRA-ILA Hawaii

Oahu Alternative Transport

Obookiah

OHA Lies

Opt Out Today

OurFutureHawaii.com

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Practical Policy Institute of Hawaii

Pritchett Cartoons

Pro-GMO Hawaii

P.U.E.O.

RailRipoff.com

Rental by Owner Awareness Assn

ReRoute the Rail

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

School Choice in Hawaii

SenatorFong.com

Sink the Jones Act

Statehood for Guam

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

UCC Truths

US Tax Foundation Hawaii Info

VAREP Honolulu

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii

Yes2TMT