Don't tax me, bro!

by Keli'i Akina, Ph.D., President / CEO Grassroot Institute of Hawaii

Every legislative session, I am asked: “So, how many tax hikes are they trying to pass this time?”

I’d love to be able to answer, “None.”

But no matter what, proposed tax or fee increases are sprinkled throughout many of the hundreds of bills submitted each year. There’s a little fee here, a little rate hike there.

For the 2025 session, the Grassroot staff did an unofficial count and came up with at least 60 potential tax hikes. The bigger, more obvious ones include the massive carbon tax increase and the so-called green fee that supposedly would affect only tourists.

Others have mostly gone under the radar so far, such as the proposed wealth asset tax or the 50-cent charge on retail deliveries.

Not every tax bill gets a hearing, and many bills are introduced simply as discussion-starters rather than proposals with a real chance of passing. But they are still worth calling attention to.

Unfortunately, it seems too few legislators consider how continual tax hikes affect our cost of living or the health of our already-struggling economy.

The perfect storm of Hawaii’s confusing tax policy can be found in SB1043 and its companion HB959 — bills that almost defy explanation.

In these two bills, we find an exemption for groceries and medical services from the state general excuse tax; an increase in the GET for everything else; an exemption for unemployment pay from the state income tax; a restructuring of the deductions and brackets of the state income tax; and a new “privilege tax” of an undefined amount aimed at many state businesses.

It’s the good, the bad and the ugly all rolled up in one.

Regardless of whether the bill is well intentioned or features a mix of both positive and negative proposals, we should not consider any bill that would ultimately increase taxes.

We definitely should not raise taxes via a GET increase. As many of us know, the GET is actually a regressive tax, falling most heavily on the least fortunate.

We should also be wary of any claim that a bill will help bring in big revenues for the state. That’s just code for “This is a massive tax hike.” And we all know that ultimately Hawaii residents are the ones who suffer because of higher taxes.

Meanwhile, we haven’t even had the chance to enjoy the full effect of last year’s personal income tax cut, and they’re already looking for ways to undermine it.

We don’t need new tax schemes to “generate revenue.” Rather, let’s focus on proposals that will put Hawaii on a path to becoming more affordable and prosperous for all.

E hana kākou! (Let's work together!)