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Hawaii lawmakers considering nation's highest income tax
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HONOLULU — Hawaii is considering overtaking California as the state with the highest income tax rate in the nation, under legislation slated for a vote this week.
The Hawaii Senate was expected to vote Tuesday on legislation that would impose a 16% tax on individuals earning more than $200,000 a year, which would beat out California's 13.3% on those earning more than $1 million.
Hawaii’s proposed new rate would also outstrip the largest combined local and state tax rate in the nation, paid by the highest income earners in New York City, which is currently 12.7%.
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Hawaii has suffered a sharp decline in tax revenue as tourism has plummeted during the coronavirus pandemic, prompting lawmakers to search for new sources of income.
The bill includes hikes to the capital gains tax, corporate tax and taxes on high-end real estate sales. The Senate Ways and Means Committee unanimously passed the measure last week.