Not surprisingly, the price of paradise is high. Hawaii already has one of the highest costs of living in the country and is ranked one of the most difficult states to earn a living in. However, taxes in Hawaii may be getting a little higher this fall. A new proposal to tax investment property is heading to the voters.
Hawaii is one of the few states in the US without a state sales tax. However, as is often the case; these savings are “paid for” in other ways. One of those ways is a new proposed tax on investment properties which is intended to generate revenue for the state’s education needs.
Recently, state Senators approved a bill that would send the measure to voters. The Hawaii State Teacher’s Association backed the bill which was introduced by state Sen. Michelle Kidani of Oahu.
One of the issues, however, is that the wording of the bill is incredibly vague. So vague, in fact, that there are no parameters set for how much or which properties would be taxed. With taxes in Hawaii already among the highest in the state, the ambiguity has some puzzled and others wary.
“The concern is, once a tax is authorized it takes on a life of its own.” – Tom Yamachika, president of the Tax Foundation of Hawaii.
As one op-ed points out, Hawaii does not have a strong and successful track record with low-tax proposals.
Many voters still remember a 1986 state transient accommodations tax (TAT), which started as a temporary 5 percent tax to fund the construction of the Hawaii Convention Center. That “temporary” tax is now 10.25%.
Detractors argue that the taxes in Hawaii are already high and that the current bill does not even guarantee that revenue will fund education; it’s intended purpose.
Other Taxes in Hawaii
According to WalletHub, Hawaii ranks as the 2nd most tax-burdened state, just behind New York. With residents devoting an average of 11.57% of their income to tax expenses, it’s not hard to see why some are wary.
In fact, many people are leaving Hawaii largely because of the high cost of living there. According to data, about 13,537 more people left Hawaii for the mainland than moved in from another state. This is continuing a trend established over the last few years.
Cost of living is a primary concern and your location matters. If the high taxes in Hawaii are causing you grief, it may be time to move elsewhere.
For That, There’s City vs City
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