WalletHub Survey: Most & Least Fair State Tax Systems

News Release from WalletHub September 15, 2014

Tax systems vary dramatically across states and localities. Today, the leading personal finance social network WalletHub released its annual report on the Most & Least Fair State Tax Systems. Some states don’t have sales tax; others don’t tax income. Some families face high property tax burdens; some enjoy generous refundable tax credits.

All tax systems are different — but which are the most fair?

As a follow up to our 2014 Tax Fairness Survey, which focused largely on federal tax policy, WalletHub analyzed and ranked the 50 states based on the fairness of their state and local tax systems. We conducted a nationally representative survey to assess what Americans think a fair state and local tax system looks like. Our analysts then ranked the states based on how closely their tax systems matched what Americans think is fair.

Key Findings & Stats

• The poor are most overtaxed in Washington, Illinois and Florida; the wealthy top 1% are most undertaxed in Wyoming, Alaska and South Dakota.
• The middle class is most overtaxed in Arkansas, New York and Hawaii.
• Americans think a fair state and local tax system taxes higher-income households at a higher rate than lower-income households.
• Conservatives and Liberals generally agree on what a fair tax system looks like. However, conservatives are more supportive of slightly higher taxes on the poor and lower taxes on the wealthy.

• Current state and local tax systems are, on average, extremely unfair. While Americans — liberals and conservatives — think a progressive tax system is most fair, virtually every state has a regressive state and local tax structure.

• Both “blue” states and “red” states are found to overtax the poor and undertax the rich, relative to what Americans think is fair.

To see where your state ranks, please visit: http://wallethub.com/edu/most-least-fair-tax-systems/6598/ 

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Hawaii Named 2nd Most Unfair Tax System in Nation

Middle Class and Poor in the Aloha State Among the Most Overtaxed

News release from Grassroot Institute September 15, 2014

HONOLULU, Hawaii—Sept. 15, 2014—A study of the tax systems of all 50 states by the financial site Wallet Hub has found that Hawaii has the second most unfair tax system in the country, trailing only Washington in the gap between what citizens consider a fair tax structure and the reality of the state system. In addition, the Aloha State ranked third among states where the middle class (defined as the 40-60% income quintile) is overtaxed and was little better about overtaxing the poor. Hawaii ranked fourth in states that overtax the lowest 20% of income earners.

The survey found that the majority of Americans, regardless of political outlook, believe that higher income households should be taxed at a higher rate than lower earners. Those states that most conform to this model were rated more fair, while those where the tax burden was heavier on middle and lower income householders were rated as "unfair." The Wallet Hub survey also noted that Hawaii is especially dependent on sales and excise taxes--the state ranked seventh in its reliance on revenues from this source.

"This survey is only confirming what too many of us realize every day," stated Keli'i Akina, Ph.D., President of the Grassroot Institute of Hawaii. "Hawaii's tax system is badly in need of reform that stimulates the economy and reduces the burden on middle class and working households. This isn't a question of partisanship or politics--the system is faulty no matter what your perspective. If Hawaii's policy makers want to help our working families in a substantial and effective way, they should seek out reforms that provide real, measurable tax relief."

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About the Grassroot Institute of Hawaii:

Grassroot Institute of Hawaii is a nonprofit, nonpartisan research institute dedicated to the principles of individual liberty, the free market, and limited, accountable government throughout Hawai`i and the Asia-Pacific region.  Read more about us at http://www.grassrootinstitute.org/

Like us on Facebook: http://www.facebook.com/GrassrootInstitute

Donate to help us grow: http://tinyurl.com/GrassrootDonate

Tweet us at http://twitter.com/grassroothawaii

About Grassroot President Keli'i Akina

Keli’i Akina, Ph.D.,  is a recognized scholar, educator, public policy spokesperson, and community leader in Hawaii.  Currently, he is President/CEO of Grassroot Institute of Hawaii, a public policy think tank dedicated to the principles of individual liberty, free markets and limited, accountable government.  An expert in East-West Philosophy and ethics, Dr. Akina has taught at universities in China and the United States and continues as an adjunct instructor at Hawaii Pacific University.  Dr. Akina is currently a candidate for Trustee at Large of the Office of Hawaiian Affairs in the 2014 General Election run-off.

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The Abercrombie-Ige Tax Hikes Have Left Hawaii With The Second-Worst Tax System

Hawaii's Middle Class Particularly Overtaxed As The Cost Of Living Soars

News Release from Hawaii Republican Party

HONOLULU (September 16, 2014) - A new report shows Hawaii owns the dubious distinction of having the second-worst tax system in the entire country, after the Abercrombie-Ige policy agenda raised taxes over $800 million in the past four years. With the cost of living soaring, it is clear Hawaii needs a new direction to get back on track.

"Four years and over $800 million in tax increases later, it is clear the Abercrombie-Ige policy agenda is taking Hawaii in the wrong direction for middle-class families. With the cost of living continuing to rise, Hawaii simply cannot afford four more years of Governor Abercrombie and Senator Ige's policies." --Ted Kwong, Hawaii Republican Party Communications Advisor

BACKGROUND:

A New Study Shows Hawaii Has The Second Worst Tax System In America. "Only Washington state's tax system is more unfair than Hawaii's, while the fairest tax systems of them all are in Montana, Oregon, and S. Carolina, the study found." (Erika Engle, "Hawaii's tax system the second-worst in U.S.,"Honolulu Star Advertiser, 9/15/14)

Hawaii's Middle Class And Working Class Are Particularly Hurt By The Broken Tax System."Hawaii's middle class are the third-most overtaxed in the U.S., and the 20 percent of residents with the lowest incomes are the fourth-most over-taxed, making Hawaii's tax system second-worst in the U.S."(Erika Engle, "Hawaii's tax system the second-worst in U.S.," Honolulu Star Advertiser, 9/15/14)

Governor Neil Abercrombie And Senator David Ige Have Passed Over $833 Million Of Tax Increases Since 2011. (Jorge Martin and Max Velthoven, "Tax Increases Enacted by Democrat Governors Since 2011," Americans for Tax Reform, 5/9/14)

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